Mark Karpelès, chief executive officer of Mt. Gox, the embattled Toyko-based bitcoin exchange, resigned on Sunday from the board of the Bitcoin Foundation, according to a person familiar with the situation.
The Bitcoin Foundation confirmed in a statement on its website that Mt. Gox had resigned its board seat and thanked Mt. Gox for its efforts in launching the group.
The move comes amid a string of longstanding technical issues that began last summer when Mt. Gox halted customer withdrawals in U.S. dollars.
This is the second time in recent months that a senior Bitcoin Foundation member and board member has resigned from the position under a cloud. BitInstant CEO Charlie Shrem, who was the board’s vice chairman, also resigned in late January after his arrest over allegations of money laundering.
The problems became more severe earlier this month when Mt. Gox halted all customer withdrawals, saying that a bug in the software for bitcoin allowed some users to alter transactions. The problems prompted CoinDesk to remove Mt. Gox from its bitcoin-pricing index earlier this month. The exchange told customers last week that it was still working on “reinitiating” bitcoin withdrawals.
Mt. Gox is one of several industry representatives on the board of the foundation, a trade organization that advocates for the virtual currency.
Many investors in the bitcoin community had called for the resignation of Karpelès from the board of the Bitcoin Foundation, including a British-based marketing consultant who has posted an online petition calling for Karpelès’s removal.
A phone call to Mt. Gox’s office in Tokyo rang unanswered.
It is the foundation’s second high-profile resignation in the past month. Board member Charles Shrem stepped down in late January after being arrested and charged with money laundering in connection with his bitcoin company. Shrem has pleaded not guilty.
Mt. Gox bitcoins traded at around $191 in midday Monday trading in Tokyo, while the Coindesk index bitcoin traded at around $578.
The “discount at Mt Gox reflects the markets ongoing belief that bankruptcy is a high possibility,” said Mark T. Williams, who teaches finance at Boston University in an email on Friday. “They have a considerable customer base that remains prevented from getting their money out,” said Williams, who has expressed skepticism about bitcoin.