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The Bitcoin Association of Australia leaves the Bitcoin Foundation

18 Nov 2015, 00:00, ,

The Bitcoin Association of Australia, the first affiliate to join the Bitcoin Foundation, has announced it will be severing ties, and moving out on their own.

The Bitcoin Foundation launched in mid 2012, with the mission to "standardize, protect and promote the use of Bitcoin,” explained Jon Matonis, Founding Board Director of the Bitcoin Foundation, in an article he wrote for Forbes.

At the time, Peter Vessenes was the Foundation’s Executive Director, and was quoted by Matonis as saying the Bitcoin Foundation “will be the organization that focuses and unlocks all of your energy and talents towards promoting Bitcoins, protecting them, and increasing their legitimacy through standardization.”

Peter Vessenes“Bitcoins truly are the Internet’s currency in my opinion and it’s so exciting to be a part of this disruptive and engaging technology!”
— – Peter Vessenes, Former Bitcoin Foundation Executive Director

In 2013, the Foundation announced its International Affiliation Program. “We are experiencing rapid adoption worldwide and are excited to welcome Bitcoin Association of Australia and Bitcoin Foundation Canada as our first two affiliate chapters. In addition, we are engaged in talks with India and Argentina and have received strong interest for collaboration from countries like China, Germany and the Netherlands,” said Matonis in a press release.

Jon Matonis“Strengthening and equipping local Bitcoin communities worldwide is at the core of the foundation’s International Affiliate Program and a priority for 2014.”
— – Jon Matonis, Bitcoin Foundation Founding Director

The Bitcoin Foundation set up an office in London, a “turnkey operation” and “organizational toolbelt.” Affiliates from different countries would be able to use this support system to establish the necessary infrastructure, credibility, and presence to lead localized educational, media, and outreach efforts regarding bitcoin.

The collaborative relationships with the foundation were meant to benefit new affiliates with shared resources, connections and support. Each affiliate was to be self-governed by a local board of directors and team.

The Israeli Bitcoin Association, the Bitcoin Alliance of Canada and many others rejected the terms proposed by the Foundation, and decided to go it alone. According to the Bitcoin Association of Australia (BAA), they were also initially opposed.

Adam Poulton, President of the BAA explained that the Foundation approached them about becoming a regional representative directly. After months of discussion, terms were settled on between the two nonprofit organizations. “We felt that by partnering with the Bitcoin Foundation we could leverage their brand and direct their effort down to the national and local level within Australia,” he said.

The BAA was formed in late 2013, with goals and ambitions that closely aligned with the Bitcoin Foundation. “It was in this sense of partnership that we both discussed a joint agreement,” the BAA stated at the time.

Bitcoin Association Australia“Both organisations could help and grow with each other in order to achieve our collective goals and to advance the cause of bitcoin within Australia.”
— – Bitcoin Association of Australia

Around the same time, Vessenes was taking action against one of the founding members of the Foundation, Mark Karpeles, the former CEO of Mt Gox. This business relationship was seen to be inappropriate, and a conflict of interest.

Karpeles was a board member, and eventually stepped down the following year, as his exchange fell under scrutiny, and later collapsed. He has since been arrested in Japan for the embezzlement of US$2.6m, while 650,000 of the exchange customers bitcoins still remain missing.

A second founding member, Charlie Shrem, is the former CEO of BitInstant. Shrem was arrested for "operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities." stated the formal complaint outlining the allegations.

The Foundation attempted to restore some faith by holding elections to replace the two disgraced founders. However, the controversial placement of Brock Pierce resulted in a wave of paying members walking away from the Foundation. Forums erupted with chatter due to Pierce’s past, which included allegations in 2000 from three previous employees at Digital Entertainment Network, who accused him of providing minors with narcotics and pressuring them for sex. He was not found guilty.

Pierce refused to step down, explaining in a letter to the Foundation that "it would set a bad precedent for the Foundation, rewarding those who make scurrilous accusations and engage in character assassination, often anonymously.”

Brock Pierce"I am guilty of nothing and have never been convicted, or even charged, with a crime."
— – Brock Pierce

Earlier this year, Jim Harper and Olivier Janssens were voted on to the Bitcoin Foundation’s Board. At the beginning of his term, Janssens made a public announcement he called “The Truth About The Bitcoin Foundation.” In the document he outlined a funding shortage, and highlighted a lack of transparency around how close the foundation was to bankruptcy. The lack of cash flow resulted in 90 percent of its employees being fired.

Bruce Fenton, a lifetime member of the foundation, was also voted in this year, taking over from Patrick Murck as Executive Director. In line with Janssens, Fenton has been very outspoken regarding fiscal reform, and a need for transparency.

Bitcoin Foundation“This week we are happy to announce a major initiative in governance and transparency for the Bitcoin Foundation. In recent discussions with members, corporations and the community, transparency was the most commonly mentioned item discussed by people seeking improvement at the foundation.”
— – The Bitcoin Foundation’s first announcement after Fenton’s election

Despite a board which is now 100 percent voted for, and a new direction, the Bitcoin Association of Australia recently announced a unanimous decision to terminate their international affiliate agreement.  “After many months of inaction on several fronts from the Bitcoin Foundation we no longer feel that there is any benefit to our organisation or to our members of being a part of the Bitcoin Foundation,” stated the BAA president, Adam Poulton.

Poulton explained that the topic has been casually discussed for several months. “The trigger for our decision was the fact that the membership portal has had several outages over the last 6 months. Unfortunately this has cost us important corporate memberships. As a result of this, we have implemented our own membership portal and have started accepting members directly.”

“Unfortunately the understanding and optimism that we had at the beginning of this journey has not translated into any significant outcomes for the BAA or for the members within Australia that we represent.”
— – Bitcoin Association of Australia

All donations and fees were previously handled by the Bitcoin Foundation. The Israeli Bitcoin Foundation were also approached to become an international affiliate, Co-Founder Ron Gross explained the structure to Bitcoin Magazine. “Basically, they proposed a sort of a revenue sharing model, where they will collect all of the member fees and the donations and within a certain period, maybe one month, they will transfer a half of that – a half of the member fees and a half of the donations – to us. And we won’t have any option of accepting either of these on our own.”

In addition to accepting member fees and donations directly, Poulton states that the Bitcoin Association of Australia can now start to build its own brand, and forge its own direction. “Although this will not change anything in the day to day operations of our organisation, we feel that our efforts are better directed at local campaigns, projects and events,” he said

The Bitcoin Association of Australia has a busy 2016 in store, focusing heavily on education, adoption and problems faced by the Bitcoin community there. “There is the ongoing issue with bitcoin businesses having reliable access to banking facilities at Australian banks. We are in the early stages of organising a high level meeting of banking representatives, regulators and government officials to see if there is any way forward for bitcoin businesses within the existing banking framework,” said Poulton.


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