Bitcoin Foundation said to be out of cash

Newly elected board member Olivier Janssens blamed 'ridiculous spending' and bad decisions

The Bitcoin Foundation, an organization that promotes development of bitcoin, is "effectively bankrupt" and has shed most of its staff, a member of the foundation's board of directors has said.

Two other board members, however, said the foundation was not bankrupt, though in need of some kind of restructuring.

The outburst by Olivier Janssens, who was elected to the board last month, is the latest in a series of controversies surrounding the foundation, which was founded in the U.S. in 2012 as a nonprofit entity.

"The foundation has almost no money left, and just fired 90 percent of its people. Some will stay on as volunteers," Janssens wrote in a blog post on the foundation's forum.

"The Bitcoin Foundation hates transparency," he added. "If they would have been transparent then everyone would know there is no money left."

Janssens attributed the foundation's financial straits to two years of "ridiculous spending and poorly thought out decisions," adding that the board has tried to remedy the situation by finding a new executive director. He called for the replacement of the entire board.

Described as a bitcoin millionaire, Janssens wrote that he will donate "several 100k" to a special trust fund aimed at supporting core development of the digital currency and supplemented by crowdfunding efforts.

The foundation did not immediately respond to a request for information about Janssens' post. But Patrick Murck, its executive director, wrote in a response to Janssens' post, "The foundation is not bankrupt, but a restructuring is needed. Olivier basically jumped in front of our announcements on that and our annual report on the 2014 finances to be released next week, and he spun it very very negative."

While saying that "the money has basically run out," board member Gavin Adresen wrote in another response that "The foundation isn't bankrupt, but the board needs to decide whether the responsible thing to do is to continue the organization with a much smaller organization and vision or to dissolve it."

The Bitcoin Foundation is no stranger to controversy. Among its founding members are Charlie Shrem, who pleaded guilty to transmitting money linked to the Silk Road online drugs site, and Mark Karpeles, who presided over the collapse of MtGox, once the world's largest trading place for bitcoin.

In May 2014, a number of Bitcoin Foundation members quit in frustration over the organization's direction and issues related to a board election.

Tim Hornyak covers Japan and emerging technologies for The IDG News Service. Follow Tim on Twitter at @robotopia.

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