How did The Bitcoin Foundation waste nearly $5m in 10 months?

wasting

In April, Payment Eye reported that TBF was on the brink of extinction, after facing reputational damage; declining membership and continued losses in 2014, which we now know total $4.6m, the equivalent of 5800 bitcoins.

Leaked documents in April revealed that the non-profit planned to split into two separate entities. A scaled-down BTF would continue as a bitcoin promotion and lobbying tool, while an entirely new investment entity was created to fund core development of the digital currency.

Two months has passed since the crisis, and founding director Jon Matonis recently participated in an Ask Me Anything (AMA) discussion on bitcoin site ZapChain. The AMA is an opportunity for community members to question leaders in a public forum.

When questioned on the firm’s mismanagement of its funds, Matonis laid out in detail where all the money had been wasted:

  • On March 2nd 2014, TBF had $4.6m worth of bitcoin to use as funding. The value of the cryptocurrency stood at $673 per bitcoin.
  • Matonis revealed that the TBF expenses for 2014 totaled approximately $1.5m, meaning that $150,000 was spent on expenses every month.
  • Tax documents reveal that most of the expenses went towards compensation for released employees, legal fees and costs of attending and hosting conferences.
  • Due to the sliding value of bitcoin during 2015, TBF wasted an additional $2.5m due to foreign exchange losses.

After revealing TBF’s losses, Matonis was immediately criticised by bitcoin enthusiasts during the AMA. Matonis quickly defended his company’s actions.

TBF

TBF are currently undergoing a ‘‘realignment process’’ with Matonis continuing in his role as board director.

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