Bitcoin Foundation Blew 5 800 Bitcoins in 10 Months

Posted in: Archive
July 1, 2015 4:01 PM UTC

The Bitcoin Foundation(TBF) Founding Director Jon Matonis explains the $4.6m loss in 2014. Funds were drained by exorbitant monthly expenses, conferences and the falling price of bitcoin. Today the ex-VISA employee advises Bitcoin entrepreneurs on funding.

The role of the organization that introduced lobbying to Bitcoin and attempted to meme-ify titles for Bitcoin developers remains ambiguous. Despite recent announcements purpotting a change in focus towards development, questions remain unanswered. Like, what happened to the 5800 bitcoin mentioned in their 2014 transparency documents?

A lot of the funds that did not go towards funding core development actually went towards sponsoring annual conferences for the Bitcoin Community at near breakeven budgets. – Jon Matonis

Tax documents from 2013 show employee compensation, conference costs and legal fees as the largest expenditures. In all, The Bitcoin Foundation blew $150,000 monthly. Documents for 2014 have not been made available. However, Matonis was recently available for comment.

No Funny Business

Matonis provided an Ask Me Anything!(AMA) to ZapChain last week. The AMA is an opportunity for community members to question leaders in a public forum.

Jon answered many questions. He reminded us that currently TBF is undergoing re-alignment; defering questions about present goals to current leaderships. Though, he was able to share information on a Bitcoin Better Business Bureau – Cryptoagency. As well as give condolences to investors partnering with altcoins.

Also Read: Ripple Labs Fined $700,000 by FinCEN for Non-Compliance

He was also asked to specifically account for a statement he made during his tenure with The Bitcoin Foundation. Straight from the lines of TBF member meeting minutes.

“There is no funny business,” assured Matonis. The price drop was the biggest factor affecting funds. Just as the majority of businesses operating in Bitcoin that year, the drop to $264 by the end of 2014 brought heavy losses.

Matonis outlined the following reasons attributed to why The Bitcoin Foundation blew through capital.

  1. $4.6m based on March 2nd, 2014 valuation ~$673/BTC because books completed up until that time (of course, if you go back to December 2013, the BTC price was even higher);
  2. Average Bitcoin Foundation expenses for 2014 of approximately $150k per month;
  3. ~90% of assets maintained in BTC as determined by board of directors;
  4. Foundation raised in nominal terms approx. $500-650k in membership dues and donations during its existence (price appreciation got us to where we were at the time);
  5. January 1, 2015 exchange rate ~$264/BTC
  6. $0.6m (balance remaining at Bitcoin Foundation on January 1, 2015)

Since my last day on the board of the foundation was December 31st, 2014, that is where my confidential access would terminate. – Matonis

No justification was given as to how the foundation would continue to operate under the $150,000 monthly costs even if the price of bitcoin never fell. A change that could have possibly delayed The Bitcoin Foundation’s realignment by another ten months.

Images from Flickr and Twitter.

Last modified: May 21, 2020 11:08 AM UTC

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