Bitcoin Foundation

The Bitcoin Foundation was an American nonprofit corporation. It was founded in September 2012 in order to try to restore the reputation of Bitcoin after several scandals, and to try to promote its development and uptake.[1] The organization was modeled on the Linux Foundation and was funded mainly through grants made by for-profit companies that depend on the bitcoin technology.[2]

The Bitcoin Foundation, Inc.
FormationSeptember 2012
Registration no.603 279 667
Legal statusDissolved on Jun 1 2015
HeadquartersWashington, D.C., USA

History

The foundation was formed in late 2012, after Bitcoin had earned a reputation for criminality and fraud, and was modeled on the Linux Foundation.[1] The chairman of the board at the founding was Peter Vessenes.[1]

Former lead Bitcoin developer Gavin Andresen was hired by the foundation as "chief scientist."[2] In June 2013, the foundation received a letter from the California Department of Financial Institutions requesting that they "cease and desist from conducting the business of money transmission in this state,"[3] and again when it published their detailed response to the regulators. In November 2013, Patrick Murck, general counsel of the foundation, testified before a United States Senate committee convened to assess digital currencies, at which the reception of bitcoin by lawmakers was generally positive.[4]

In January 2014, the foundation's vice-chairman, Charlie Shrem, was arrested for aiding and abetting the operation of an unlicensed money-transmitting business related to his role in assisting agents of the online marketplace Silk Road; he resigned later that month and pled guilty in September 2014.[5][6][7]

In February 2014, Mark Karpeles, then CEO of the Mt. Gox exchange, resigned from the board after Mt. Gox lost 750,000 of its customer's coins and went bankrupt, causing the value of bitcoin to crash; Executive chairman Peter Vessenes' business relationship to Karpeles has been described as inappropriate.[8] Professor and author Mark T. Williams criticized the foundation's priorities, published an editorial in Business Insider that month, and wrote: "A Foundation of 'B' players has no business claiming it is a protector of a system that remains vulnerable and untrustworthy."[9]

In March 2014, the foundation hired Jim Harper of the Cato Institute to help it deal with policy issues and the government with the title Global Policy Counsel, and also hired Amy Weiss of Weiss Public Affairs as a media consultant.[10][11] In July 2014, the foundation retained a lobbying firm, Thorsen French Advocacy, to work for a favorable regulatory environment in the US for bitcoin.[12] Some libertarian bitcoin advocates have criticized the organization's strategy of political lobbying and participation with federal regulators.[13][8]

In May 2014, BTC China CEO Bobby Lee and venture capitalist Brock Pierce were appointed to the foundation's board of directors, filling vacancies left by the resignations of Shrem and Karpelès. 10 people resigned from the foundation due to allegations dating from 2000 that Pierce had pressured minors into sex at a company he had founded.[14] Nine members of the foundation resigned following the May election, citing opposition to the appointments and the direction of the organization.

After the election, the foundation's directors included chairperson Peter Vessenes, Gavin Andresen, Bobby Lee, Micky Malka, Jon Matonis, Brock Pierce, and Elizabeth Ploshay. In October 2014, Jon Matonis resigned from his position of Executive Director of the Foundation, and at the end of the election cycle on 31 December 2014 stepped down from the group's board of directors.

In November 2014, Cody Wilson announced his run for a board seat, stating "I will run on a platform of the complete dissolution of the Bitcoin Foundation and will begin and end every single one of my public statements with that message." [15]

In March 2015, Harper and Olivier Janssens, a founder of the Freedom Investment Group, were elected to the board

In April 2015, the board appointed investor and financial consultant Bruce Fenton as Executive Director of the foundation.[16] In July 2016, Fenton was replaced by Llew Claasen.[17]

In July 2015, Janssens made a public announcement on both the foundation's online forum and Reddit concerning the near-term insolvency of the organization, which had been kept secret by the board. As a result of this and a lack of cash flow, various staff were terminated.[18] Following disagreement over the future of the organization—Harper and Janssens having both cast votes to dissolve the Foundation—Harper resigned and Janssens was removed from the Board in December 2015.

References
  1. Beaumont, Peter (3 October 2012). "Bitcoin Foundation hopes to revive reputation of online currency". The Guardian.
  2. Bustillos, Maria (2 April 2013). "The bitcoin boom". The New Yorker. Retrieved 30 December 2013.
  3. McMillan, Robert (24 June 2013). "California says the Bitcoin Foundation is a money-transferrer". Wired. Retrieved 31 December 2013.
  4. Lee, Timothy (23 November 2013). "For Bitcoin, a successful charm offensive on the Hill". Washington Post. Retrieved 24 November 2013.
  5. Jerving, Sara (September 6, 2014) "Bitcoin Promoter Charles Shrem Pleads Guilty" The Wall Street Journal
  6. Hill, Kashmir (January 27, 2014). "Winklevosses, Bitcoin Community Shocked By Arrest of BitInstant CEO Charlie Shrem". Forbes.com. Retrieved May 16, 2014.
  7. Jeffires, Adrianne (January 28, 2014). "Charlie Shrem resigns from the Bitcoin Foundation after arrest". The Verge. Retrieved May 16, 2014.
  8. Tiku, Nitasha (March 7, 2014). "Whistleblower Threatens to Expose Corruption at Bitcoin Foundation". ValleyWag. Archived from the original on May 17, 2014. Retrieved May 16, 2014.
  9. Williams, Mark T. (25 February 2014). "Mt Gox: The tower of toxic sludge". Business Insider.
  10. Sidel, Robin (11 March 2014). "Bitcoin Foundation to Ramp Up Lobbying Efforts". Wall Street Journal.
  11. "Jim Harper joins Bitcoin Foundation as global policy counsel and Amy Weiss as media consultant" (PDF). Bitcoin Foundation (Press release). 11 March 2014. Archived from the original (PDF) on 7 April 2014.
  12. Wilhelm, Alex. "Bitcoin Foundation Hires Lobbying Group To Take The Cryptocurrency To Washington". TechCrunch. Retrieved 2017-11-20.
  13. Neal, Meghan (May 12, 2014). "Bitcoin is Hiring Lobbyists". Motherboard.com. Retrieved May 16, 2014.
  14. Menn, Joseph (May 16, 2014). "Bitcoin Foundation hit by resignations over new director". Reuters.com. Retrieved May 16, 2014.
  15. del Castillo, Michael (22 December 2014). "It's official: Cody Wilson is trying to destroy the Bitcoin Foundation from within". Upstart.
  16. "The Bitcoin Foundation Welcomes Bruce Fenton as Executive Director". Bitcoin Foundation. April 13, 2015. Archived from the original on May 10, 2015. Retrieved March 28, 2016.CS1 maint: unfit URL (link)
  17. "Bitcoin Foundation Appoints Llew Claasen as Executive Director". Archived from the original on 2016-07-24. Retrieved 2016-07-12.
  18. Pick, Leon (July 4, 2015). "Olivier Janssens: Bitcoin Foundation Has No Money Left". Financial Magnates. Retrieved March 28, 2016.
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