MtGox CEO Karpeles resignation from the Bitcoin Foundation a good sign for the community

mtgox-bitcoinThis weekend signaled the resignation of MtGox CEO Mark Karpeles from the Bitcoin Foundation in the wake of numerous controversies over the status of MtGox and his statements to the press. Since technical troubles struck MtGox—and the exchange froze bitcoin withdrawals—global BTC market value has dipped as low as $550 and the value of bitcoins on MtGox fell nearly to $140.

Yesterday, The Wall Street Journal reported:

Mark Karpeles, chief executive 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 move comes as amid a string of longstanding technical issues that began last summer when Mt. Gox halted customer withdrawals in U.S. dollars. The problems became more severe earlier this month when Mt. Gox halted all customer withdrawals, saying that a bug in the bitcoin software allowed some users to alter transactions.

The announcement came via the Bitcoin Foundation’s blog in a short, but sweet, “effective immediately” post.

Karpeles blaming the Bitcoin protocol for MtGox’s woes—a charge directly and strongly rebuffed by Bitcoin Core developers—has not painted a good picture in the press about the actual reliability of Bitcoin as a currency system. His statements to this effect seem to be in direct opposition to the mission of the Bitcoin Foundation, which is one of advocacy and advancement for the adoption of Bitcoin.

The resignation of Karpeles from their board speaks well to that mission and it paints a brighter picture about the post-MtGox Bitcoin ecology.

MtGox has been the exchange-of-note not because it was the best, but because it’s the largest. Having had the advantage of coming on the scene earlier than most other exchanges, MtGox maintained the inertia of popularity and many of the ups and downs in the BTC market have been tied to MtGox’s technical issues and poor customer relations.

In the wake of those technical issues and the subsequent bitcoin withdrawal freeze, MtGox has been dropped from many important bitcoin market indexes.

In the wake of this resignation news, MtGox has also erased its entire Twitter history.

Weary MtGox customers wait to retrieve their property

People who had BTC or money on MtGox have been waiting for news from the exchange about when bitcoin withdrawals might become available again. Right now, without being able to get bitcoins or money off the exchange it’s essentially the walking dead—and because withdrawals could happen swings in value on MtGox also affect the global average as people prepare for potentially cheap “Gox coins” to enter the market.

When MtGox unfreezes bitcoin withdrawals or allows money transfers, it may not be the end of the exchange, but it certainly does appear to signal the end of the era of MtGox as premiere exchange.