The Bitcoin Foundation, formed in 2012 to promote the virtual currency, has rejected claims by a board member that its bankrupt but has acknowledged significant financial problemsironically as a result of a big drop in the value of its bitcoin holdings. <\/p>\n
On Tuesday its board of directors rejected claims made a day earlier by board member Olivier Janssens that it was effectively bankrupt, but said the bitcoin roller coaster has forced it to drastically cut back its operations. <\/p>\n
In early 2013 a bitcoin was valued at around $14 but that soared to $1,145 by November that same year, according to Coinbase. Three weeks later, it had collapsed to $569 and continued wide swings throughout much of 2014. Today, a bitcoin is worth about $258. <\/p>\n
Those swings add up to bad news for the organization. <\/p>\n
The drop in bitcoin price drastically affected the Foundations bottom line as the majority of assets were held in bitcoin, it said. <\/p>\n
As a result, the foundation has cut programs to concentrate on one mission: development of the Bitcoin Core Protocol. Staff numbers have also been cut, although the foundation rejected Janssens claim that 90 percent had been fired. <\/p>\n
Some team members left voluntarily and agreed to continue helping on a volunteer basis to help the Foundation during this financially austere time, it said. <\/p>\n
The foundation hasnt revealed exactly how many bitcoins it holds, but a filing with the Internal Revenue Service said the holding was worth $4.5 million at the end of 2013. Based on figures from Coinbase, that was equivalent to just over 6,000 bitcoins. Today, those bitcoin would be worth $1.5 million. <\/p>\n
The current state of the foundations finances should become clearer in the coming weeks when its latest IRS filing, covering 2014, becomes public. <\/p>\n
And when it does, the board might face questions about why they didnt diversify the foundations assets to put it on a more stable base, instead choosing to keep them all in a volatile investment. <\/p>\n
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Bitcoin Foundation hit hard by big bitcoin losses<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The Bitcoin Foundation, formed in 2012 to promote the virtual currency, has rejected claims by a board member that its bankrupt but has acknowledged significant financial problemsironically as a result of a big drop in the value of its bitcoin holdings. On Tuesday its board of directors rejected claims made a day earlier by board member Olivier Janssens that it was effectively bankrupt, but said the bitcoin roller coaster has forced it to drastically cut back its operations. In early 2013 a bitcoin was valued at around $14 but that soared to $1,145 by November that same year, according to Coinbase Continue reading