Bitcoin Foundation Is 'Effectively Bankrupt,' Considers Restructuring: Report

The Bitcoin Foundation, the nonprofit that has led adoption and standardization efforts for the open-source cryptocurrency, is considering restructuring into two smaller organizations, just days after one of its board members said it was “effectively bankrupt.”

The foundation itself has no control over the open-source Bitcoin, but it has taken a strong role in organizing the community and calling for standardization and adoption.

On Tuesday, Bitcoin Magazine reported that the foundation was considering splitting into two parts, one focused on maintaining and developing the currency’s core database, and the other as a promotional organization designed to foster the currency’s growing community.

Olivier Janssens, the group’s newest board member who was elected last month, wrote a scathing forum post on Saturday, claiming the foundation was out of money and had shed most of its staff, hiding these problems from its members.

“The Bitcoin Foundation hates transparency. If they would have been transparent then everyone would know there is no money left. ... The Foundation has almost no money left, and just fired 90% of its people. Some will stay on as volunteers,” he wrote. “If I get asked to leave the Foundation for telling the truth, so be it. The truth is being told.”

He blamed the foundation’s problems on two years of “ridiculous spending and poorly thought out decision,” and said the board’s plan to find a new executive director is insufficient, calling for the entire board to be replaced.

"My big issue was that they did not tell the membership about the real financial status," Janssens told Ars Technica. "You can’t be a member-run non-profit and still try to get money from your corporate or individual sponsors while hiding the fact that you’re near-bankrupt. That’s the reason I came forward, I could not live with that. That’s up to the members to decide."

Janssens previously threatened to give up his lifetime membership in 2014, after a board member, Brock Pierce, was linked to a sex abuse case, but ultimately decided against it.

In a response on Saturday, board member Patrick Murck refuted the claims. "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," he wrote.

Previous board members of the Bitcoin Foundation have been embroiled in controversies. One of its founders, Charlie Shrem, pleaded guilty to transmitting money that was linked to the illegal Silk Road marketplace, and another, Mark Karpeles, who was the head of Mt. Gox, the world’s largest trade site for Bitcoins, when it collapsed.