Topic: Gox collapse due (in part) to neglect of Bitcoin Foundation Board? (Read 899 times)

If you can never be sure whether the place you put Bitcoins is legit and secure, Bitcoins will fall back to be a "geek"'s currency. Only those people being able to research enough about the destination will be able to participate. And this is not only concerning exchanges, even buying Pizza with Bitcoins requires a safety in payment process, that the Bitcoins are transmitted and stay at the Pizza service.

Therefore i am convinced it would be wrong to not address the aspect of transaction/investment security. It would make Bitcoins unsafe for the majority of people.


It's enough to implement an auditing authority that then awards a sign or seal of approval. Transparent quality standards must be implemented at some point. Otherwise Bitcoins will stay an insider currency. Karpeles was a programmer - he went bankrupt big time. If he had someone who told him, you need to fix this, you need to have a certain amount of Bitcoins secured offline, you need to ... and we check that now... - he would have been happy. He's obviously not the most clever one. And who knows how many more jerks are out there leading Bitcoin companies without having a clue about financials or management (risc management!!). With Bitcoin standards that not only exist on paper, but are audited and then awarded with a logo, you get transparent information for non-Bitcoin specialists.

In case of Karpeles - it's unbelievable that he was in the board. If even (former) board members are that clueless, the Bitcoin Foundation in its current state doesn't look like an acceptable authority here.

Only if Bitcoins are secure for a widespread audience, they will be able to continue to succeed in becoming a global currency. And for that, transparent security standards that are audited help quite a bit.

It would be nice if the "Bitcoin Foundation" was at least brainstorming publicly about how to stop this becoming a recurring issue or at least what went wrong.  

But basically complete silence.  Useless unless they are doing a lot behind the scenes we dont know about.

Its not the first and wont be the last time users have been hit for massive $$$ in Bitcoin.  Be it a scam or a theft.

There seems to be zero interest in the issue at all.  As much as Bitcoin can be one huge Libertarian Circle Jerk with the its all the users fault thing.  Its chances of wider acceptance get harmed seriously every time this stuff happens.  We need something like Bitcoin!!!!!!!!  So please guys dont fuck it up and set shit back time and again in an attempt to be pure.

This!

I blame the BTC Foundation in part for the Gox fiasco. Any other body making similar claims regarding representation of the people and the good of the currency and industry would have been on Gox like a tonne of bricks. But these useless morons were too close to Gox.

The Foundation said virtually nothing during the whole time. It has said virtually nothing since. So what is the point of it? If it cannot act or at least be shown to be deeply worried about the biggest BTC robbery ever, one worth $500m, and continues to make inane tweets about a new BTC merchant in town X, or some other triviality, then fuck it.

The website is hardly updated, and the forums are dead, with the same 10 faces posting crap saying stuff like "nobody really knows", etc.

To fair to Jon Matonis, I got the feeling he wanted to say something on his Twitter but held back (I had a couple of short encounters with him). I guess the one and only rebuke Gox got was about the malleability thing, and even then the Foundation did not take an official position, it just reported it was contested as an issue.

It's rotten to the core, institutionally dysfunctional and needs disbanding or overhauling.

Um...Vessenes is the Chairman of the Board of the Bitcoin Foundation.  He supposedly 'resigned' or something 3 quarters ago, but it looks to me like he just changed the title from 'executive director' to 'chairman of the board'.

For those who are new, note that Coinlab (which was had/has Vessenes as CEO) pocketed $5M of Mt. Gox's money (read 'yours' if Mt. Gox owes you USD.)  He also sued Mt. Gox for $75M.  Mt. Gox counter-sued to get the $5M back.

Karpeles did NOT visit the U.S. around the time this was all going down which was also around the time of the San Jose conference in which Vessenes figured prominently.  Hardly a surprise (though fraudsters all the way up to Josh Zerlan made a showing!)

I mention these little things because 'neglect' on the part of the Bitcoin Foundation is probably not a good description of their involvement.  I'll wager than when the final story is written we'll find that the Bitcoin Foundation had probably more to do with the failure of Mt. Gox than any other entity with the possible exception of the U.S. government.  I think it most likely that they worked cooperatively in this project though.

I also can not understand this silence. Half a billion dollars are missing, and they all act like nobody knows anything.

Half a billion… and nobody can answer what happened. Something is wrong.

It's well documented that Karpeles was advised by Gavin Andersen months ago about Gox's vulnerabilities. I don't hold anything against him or the Bitcoin Foundation for the failure of Gox to adequately attend to the issue. Karpeles chose a quick patch up. Bitcoin is peer to peer. They can't be responsible for every peer.

Kevinm I am tempted to agree with your point but even though I lost 81 BTC at Gox, I have to say it wasnt the responsibility of the Bitcoin Foundation before the fact. We knew there was no cavalry to back us up.

But...


this is the issue for me. Like you, I just want to know what really happened. After the fact the Bitcoin Foundation don't seem to have done much. Anyone who did not lose anything at Gox keeps repeating "just move on; your BTC are gone; its your own fault for leaving them there; for the greater good of bitcoin lets think about something else...". Well we can't move on until there is full and frank disclosure.

Did Karpeles really let the BTC get stolen without anyone noticing? or did he just lose the keys to his wallet? or do the FBI have them? or does he actually still have them and he's lying about the theft? We don't know. Anything I have read that tries to be definitive is just speculation.

I would like to know that the Bitcoin Foundation are doing everything possible to facilitate the discovery of the truth. So far they have been deafeningly silent. Are any experts other than well meaning community members scrutinising the blockchain? interviewing witnesses? pressuring Karpeles for answers? Maybe they are just underfunded and under-resourced. I don't know.

But I hope that somehow we get the full truthful story some day. The Bitcoin Foundation could do their reputation a lot of good by being seen to be helpful finding the truth.

In trying to make sense of all of the recent activity and events, I began thinking about the initial few days where there was public mud slinging and tit for tat comments between Karpeles and members of the board on the Bitcoin Foundation. It seems the Board knew of Gox's vulnerability to double spends through Maleable Transaction weakness caused by their unique code and payment practices.
 
The Second point of vision of the Bitcoin Foundation (according to their website) is "Protection of Bitcoin"

They state:

"Cryptography is the key to Bitcoin’s success. It’s the reason that no one can double spend, counterfeit or steal Bitcoins. If Bitcoin is to be a viable money for both current users and future adopters, we need to maintain, improve and legally protect the integrity of the protocol."

If this is so,
Shouldn't the Foundation have an implicit right if not obligation to audit BTC exchanges and insure their cryptography complies with the requirements of the Foundation? Should not the modus operandi of every exchange be under close scrutiny of the Foundation? After all if we continue to see corruption and theft in exchanges, Bitcoin will ultimately fail

The Foundation has a board member called Micky Malaka:

From the website;

 "Micky is the founder and sole General Partner of Ribbit Capital, a Silicon Valley-based venture capital firm. He has over two decades of global experience in the financial services industry. He started five financial services companies – his first at the age of 18 – in the U.S., Europe and Latin America, and serves on the board of multiple financial services businesses, including Wonga, Mercado Libre, and Lemon. He lived through hyperinflation in Venezuela and Brazil, where he witnessed more than half of the banks in his home country fail. As a result, he strives to help create tangible solutions and financial reform for the antiquated industry."

Well now Micky can add Gox to his list of Financial institutes that he has witnessed FAIL. Just what tangible solutions are being worked on to achieve financial reform for the present exchanges? If they are too busy, isn't it about time that the board addresses this staffing shortfall and appoint a member who can be specifically assigned to Quality Assurance and auditing of all Exchanges and ultimately SAVE BITCOIN?

Would like to hear other community members ideas and suggestions on this,

cheers,
kev