Bitcoin Foundation is effectively bankrupt, board member says

Further Reading One of the newly elected board members of the Bitcoin Foundationthe 2.5-year-old organization that was meant to bring order to the famously open source and freewheeling cryptocurrencyhas declared the group "effectively bankrupt."

While the Bitcoin Foundation obviously does not have control over Bitcoin itself, its the closest thing to a public face that the community has. Individual memberships start at $25, while corporate memberships start at $1,000 annually. The non-profits own tax filings from 2013 show that it ended that year with over $4.7 million in total assetsnearly five times as much as it had at the same time the previous year. It has yet to release financial details for 2014.

The organization was founded in 2012 by a number of Bitcoin luminaries who have since fallen, and the group itselfhas been marred by controversy in recent months. Of its original five founders, one isnowin prison (Charlie Shrem), another oversaw the collapse of the largest Bitcoin exchange (Mark Karpeles), and yet another has since left the United States for a Caribbean nation known for offshore banking (Roger Ver). Of the original board members, only Bitcoin lead developer Gavin Andresen has remained.

The Bitcoin Foundation did not immediately respond to Ars request for comment, nor did it address the issue on Twitter or its blog.

In a Saturday blog post, the new member, Olivier Janssens, claimed that the group has been hiding this financial distress from its membership. As he wrote:

The Bitcoin Foundation hates transparency. If they would have been transparent then everyone would know there is no money left. Something I think the members have a right to know, wouldnt you think? Members have a right to know that the current board failed to tell them the truth, and that their way of running the organization resulted in it going bankrupt. But instead of taking responsibility, they want to find the next executive director that will come up with another magic plan. Ironically, being transparent from the start might have prevented this whole thing to begin with.

Janssenspreviously said in May 2014 that he would resign his lifetime membership from the organization after board member Brock Pierce wasallegedlylinked to a sex abuse case. He ultimately decided not to leave it and wanted to reform thingsfrom withinJanssens recently stood for election to the groups board and succeeded on that effort.

"My big issue was that they did not tell the membership about the real financial status," Janssens told Ars via an encrypted chat on the Telegraph app."You cant be a member-run non-profit and still try to get money from your corporate or individual sponsors while hiding the fact that youre near-bankrupt. Thats the reason I came forward, I could not live with that. Thats up to the members to decide."

Janssens said he would prefer to heed whatever the groups existing members decide.

"If its up to me, Id make it a positive-only organization, no longer involved in any power position," he added."I would think its great to engage the members and make a map of every store in the USA, and have members go store to store to convince them of the benefits of Bitcoin, and in return they could get an affiliate percent or a referral reward. I also see the Foundation helping to organize mass changetip events to get a bitcoin (or bit) into the hands of every person in this world. For something like that, it can be very useful, and add a lot of value to Bitcoin itself. Its a non-threatening, positive thing to do."

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Bitcoin Foundation is effectively bankrupt, board member says