Mutiny At Bitcoin Foundation Over New Director Brock Pierce

At least ten members of the Bitcoin Foundation have resigned to protest the appointment of US entrepreneur and former child actor Brock Pierce to its board of directors.

According to Reuters, the members are not comfortable with a director who has been previously accused of fraud and sexual abuse, even though all of these allegations have been settled.

Pierce helped launch four Bitcoin-related start-ups, including KnCMiner – the builder of the first Bitcoin mining data centre – and financially backed a dozen more. He recently made the headlines for offering to buy the defunct Mt Gox exchange for one Bitcoin.

Moral panic

The Bitcoin Foundation is a US-based non-profit established in 2012 to standardise the software design of the virtual currency, improve the encryption algorithms and promote it as a reliable, convenient way to pay online. It has more than 1,500 members, but only around 100 are eligible to choose members of the board.

Pierce became famous as a child after starring in a number of Disney films including The Mighty Ducks and The First Kid. In the late nineties, he founded several companies including Digital Entertainment Network, a pioneering streaming video service, and Internet Gaming Entertainment, which was among the first to trade in-game currency of popular online games like World of Warcraft for real money.

After becoming interested in cryptocurrencies, Pierce co-founded KnCMiner, a popular mining rig vendor, along with another three Bitcoin companies. One of them – Sunlot – offered to save Mt Gox by buying it for a single Bitcoin, but the plans were criticised as lacking detail.

The entrepreneur was elected to the Bitcoin Foundation board of directors a week ago, with a 65 percent approval. However some of the members are not happy with this decision, enough to quit the foundation altogether.

A few have criticised Pierce’s past, which includes accusations of fraud and claims that he sexually abused minors. The situation is not helped by the fact that Pierce is a close friend of ‘X-Men’ director Brian Singer, who is currently facing similar abuse allegations. Pierce has denied any wrongdoing.

The members who have left the foundation wanted to remove Pierce from the board, and introduce new rules that would have the prospective members thoroughly vetted before they join the organisation’s inner circle.

The Bitcoin Foundation is going through something of a rough patch lately: its vice president Charlie Shrem has been accused by the US authorities of operating an unlicensed money transmitting business, violating the Bank Secrecy Act and conspiring to commit money laundering through the now-defunct Silk Road marketplace.

Mark Karpeles, the founder of the bankrupt Mt Gox exchange, resigned from the board shortly before admitting his venture lost at least 750,000 BTC, worth around $333 million today.

Pierce and Bobby Lee, head of BTC China, were appointed to replace Shrem and Karpeles, but even though it was the result of a vote, it seems new directors have created more problems than they have solved.

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