On Tuesday, the Bitcoin Foundation issued a response to claims made by newly elected board member Olivier Janssens, who declared the organization to be “effectively bankrupt” and called for a membership rebellion against a governance he accused of acting in secrecy, reported the Wall Street Journal.
Elected in February by the Bitcoin Foundation’s individual members to a board seat representing their interests, Janssens wrote on the Foundation’s online forum Saturday that the group had “no money left” and had fired 90 percent of its staff, blaming this on gross mismanagement by a board that had “failed to tell [members] the truth,” said the Wall Street Journal. Janssens also accused current management of looking to centralize control over core development of Bitcoin’s open-source core software – something he claims the Bitcoin community does not want the Foundation involved in – and called for members to force a vote for change, including the group’s possible disbandment.
Janssens told the Wall Street Journal that he had been confronted with “certain truths” about the state of the Bitcoin Foundation after he became a board member and “felt obligated to share them with members.”
In response to speculative posts on Reddit and its own forum, the Foundation’s board stated that the entity is not bankrupt, and there have not been any discussions about a possible bankruptcy. “As with other bitcoin companies that hold bitcoin, the drop in bitcoin price drastically affected the Foundation’s bottom line as the majority of assets were held in bitcoin.”
The Foundation refutes the claim it fired 90 percent of its staff, though given the hit to its assets it decided to trim down programs and focus on funding developers working on the Bitcoin Core Protocol, which meant downsizing. Some members left voluntary and agreed to continue helping the Foundation on a volunteer basis.
The board also said that “potential donors and investors interested in funding core development [had] expressed concerns over the Foundation’s corporate governance structure – that is specifically an elected board.” This governance issue – the notion that industry donors worry that the elected board’s 50/50 split put its programs at risk of being disrupted by rebellion from individual representatives – was addressed in a strategic plan approved at a board meeting last week, reported the Wall Street Journal.
As noted by the newspaper, the strategic plan would spin off an entity called New Co. that would be completely funded by industry donors. Its role would be to pay for work by Bitcoin’s five-person core coding team – three of whom currently get a salary from the Foundation – and create a standards body around the code. Separately, a “Bitcoin Foundation v. 2.0” entity would persist under the existing governance structure, but with a smaller staff focused entirely on Bitcoin promotional activities.
Though Janssens wants to extract the Foundation from core development financing, the board’s strategic plan conflicts with an alternative solution he had proposed when campaigning for election, said the Wall Street Journal. Janssens wished to launch an independent, crowd-funded trust fund – to which he has vowed to commit $100,000 of his own money, for Bitcoin Chief Scientist Gavin Andresen and his team to use as they wish. Janssens argues that this was consistent with the wishes of the Bitcoin community, which, through his election, had made it “clear that people did not want the Foundation meddling with core development.”
Members’ responses to Janssens’ comments were divided, said the Wall Street Journal. While some applauded him for speaking out and vowed to help him spark change at the Foundation, other echoed the concerns of Foundation member Sebastian Jurk, who said disbanding the group would be a “bad advertisement” for Bitcoin.
Janssens’ views have garnered support from Jim Harper, a former Foundation employee who was also elected to fill an individual board member seat in the February election. He told the Wall Street Journal that “the Foundation has become very much industry-oriented and very much a disappointment to the community.”
In response to Janssens’ post, Andresen wrote, “I still think the best way to move forward with core dev funding is some type of non-for-profit legal entity, whether that is Olivier’s crowdfunded Trust or something else (or both) I don’t really care.” Andresen added, “I DO care that it is legal, transparent, and that I’m never put in the position of deciding how to divvy up a Big Pile Of Money.”
Bitcoin Foundation logo: Courtesy of Bitcoin Foundation
Gavin Andresen photo: File photo