MtGox CEO quits Bitcoin Foundation, the second in a month to do so

By Danny Palmer
24 Feb 2014 View Comments
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The chief executive of one of the largest bitcoin exchanges in the world, MtGox, has resigned from the Bitcoin Foundation.

The organisation, which states its primary objectives to be standardising, protecting and promoting the virtual currency, announced that MtGox head Mark Karpeles had quit the foundation.

"Effective immediately, MtGox has submitted their resignation from the board of directors. We are grateful for their early and valuable contributions as a founding member in launching the Bitcoin Foundation," said the statement.

Further reading

"MtGox Co Ltd (Japan) held one of the three elected industry member seats. Further details, including election procedures, will be forthcoming," it added.

The resignation comes after MtGox, which describes itself as "the world's most established Bitcoin exchange" halted transfers of Bitcoin after "unusual activity" was spotted. The firm even blamed a software problem with Bitcoin itself for the abnormalities.

"A bug in the Bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of Bitcoins to a Bitcoin wallet did not occur when in fact it did occur," the organisation said.

"Since the transaction appears as if it has not proceeded correctly, the Bitcoins may be present. MtGox is working with the Bitcoin core development team and others to mitigate this issue," MtGox added.

All tweets by the Japanese-based virtual currency exchange have since been deleted.

The resignation of Karpeles represents the second exit from Bitcoin Foundation within a month, following Charles Shrem's departure after having been arrested and charged with money laundering relating to his New York Bitcoin exchange BitInstant as part of the ongoing investigation into Silk Road. Shrem has pleaded not guilty.

It's been a troubling month for Bitcoin, which also saw Tim Buckingham, partner in Eversheds LLP's Financial Services Dispute Resolution team, warn that businesses considering accepting Bitcoin as payment should ‘leave it alone,' because the virtual currency is still unregulated.

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