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Fenton Responds to Criticism of Bitcoin Foundation; Open to Audit

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In an open-letter style post on r/bitcoin entitled “Bitcoin Foundation: Where did all the Money Go?” Bitcoin Foundation chairman Bruce Fenton has responded to recent criticism and requests from the Bitcoin community for a complete audit.

The Foundation had successfully raised around 5,800 bitcoins in 2014 which were equivalent to around US$3.9 million at the time. Those funds, however, have since all but dried up with what many members of the community feel is a lack of transparency and accountability.

Fenton said that the organization has lost most of its bitcoins due to “ridiculously wasteful and reckless” spending, developer salaries, and a drop in the bitcoin price.

I don’t defend these financials, I certainly don’t apologize for them or attempt to justify them. I had nothing whatsoever to do with these decisions,” he wrote.

According to his statement, the organization under its previous leadership spent over US$1 million to host Bitcoin 2014 in Amsterdam and to pay for Apple Fundraising Consultants and THEPOLICYCOUNCILCOM INC which acted as the foundation’s Global Policy Council for 9 months in 2014. The Amsterdam event did not break even, and possibly even operated at a substantial loss..

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The Bitcoin Foundation also spent nearly US$540,000 on the salaries of former executive director Jon Matonis, current executive director Patrick Murck, COO Jodie Brady, and chief scientist Gavin Andresen.

As a result of the combination of their monthly expenses, which totaled over US$150,000, and the significant bitcoin price drop in 2014, the Foundation burned through 5,800 bitcoins, which at current prices would now have been worth more than US$2.5 million.

On the subject of a potential audit, Fenton said, “I’m happy to support an audit provided someone can lead it and do the work involved and/ or support the costs of one.” He wne on to offer a bounty of 10% to “anyone with information and evidence of any such act leading to recovery of any funds which were misappropriated or stolen.”   

On December 22, the Foundation announced that the organization would begin 2016 with a new mission statement and a realigned team to recover from the staggering financial losses of the past years. Currently, Fenton and the other board members are exploring methods to consider a full audit and clear its financial issues. However, Fenton cannot provide the official financial documents needed to completely understand the budget deficit of the organization.

“Many people think that the change in management and new focus, combined with a new mission statement can help the organization to help Bitcoin more. I wish that the foundation hadn’t had so many problems. I did think it was worthwhile to try to help the organization,” added Fenton.

This year, the Bitcoin Foundation will significantly lower its expenses by eliminating the salaries for its board members. With a more responsible layout of its budget and financial control, Fenton and the new board hope to reestablish the Foundation as the leading non-profit organization in the Bitcoin industry.