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Petition To Remove Mark Karpeles From The Bitcoin Foundation Board

MtGox Karpeles Industry member

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#1 John Meese

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Posted 18 February 2014 - 06:19 PM

A petition is currently circulating to gather signatures and encourage the Bitcoin Foundation (namely, us) to remove Mark Karpeles, CEO of MTGox from the Bitcoin Foundation board as an industry member. You can view the petition here: Petition to the Bitcoin Foundation. The argument is as follows:

"The Bitcoin foundation serves as a figure head for the Bitcoin community, one of the purposes being to educate and build trust in the protocol. It is often cited by the mainstream press who look to the foundation to provide guidance and comment.

Mark Karpeles, CEO Of Mt Gox has continually proven himself to be incompetent, causing fear in the community and damaging the trust signals that Bitcoin relies on so as to be taken seriously.

Aside from the countless other issues that Mt Gox has encountered over the previous years, this week Mark Karpeles irresponsibly released information stating that the issues the company were facing with withdrawals were due to "A bug in the Bitcoin software" something which was disputed by Gavin Andresen:

https://bitcoinfound...org/blog/?p=418

Further to this, despite having been questioned this morning, Mark refused to comment on the status of customer's money, instead leaving the customer who'd travelled all the way from The UK to wait outside in the snow. This is not the behaviour that we should expect from a board member!

We would like him to be removed from his position on the board and all association with Mt Gox to be removed from the Bitcoin Foundation website."


Here is the relevant section of our bylaws:

Section 5.16 Resignation and Removal:

a. Resignation. A director may resign at any time by giving written notice to: (i) the Board of Directors; (ii) the Chairman of the Board; or (iii) the Secretary of the Corporation. Such resignation is effective when notice is effective. Notice of resignation is irrevocable once delivered, unless the Board of Directors permits withdrawal prior to its effectiveness.

b. Removal for Cause. The Board of Directors may remove any director elected by the members for cause at a meeting called for that purpose, if the director has been: (i) declared of unsound mind by a final order of court; (ii) convicted of a felony; or (iii) found by a final order or judgment to have breached any duty arising under these Bylaws, the Articles, or applicable law. Only the Board of Directors may vote to remove such director by a majority vote of the remaining directors.

c. Removal Without Cause. Any director may be removed without cause at a meeting called for that purpose by the Board of Directors. The director may be removed without cause by the affirmative vote of two-thirds of the directors then in office.


Unless Mark Karpeles decides to resign, it appears that the Board of Directors would have to meet and two-thirds would have to advise his removal. Regardless, I would like to encourage other Bitcoin Foundation members to share their input and for the Board of Directors to—at the least—respond in some manner.

#2 Brad Wheeler

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Posted 18 February 2014 - 06:56 PM

I thought section 3.6 (b ) also applies here because we are dealing with Founding Members.

(b ) Expulsion, Termination or Suspension. Except for the Founding Members who shall only be removed for cause (per the requirements detailed in Section 5.16(b )), a majority of the Directors then in office may terminate any other membership after giving the member at least 30 days' written notice (for which email shall suffice) of the termination and the reasons for the termination, provided that (except in the case of termination for non-payment of membership dues, fees, or assessments in a timely fashion) the member has an opportunity to be heard by the Board, either orally or in writing, no less than five (5) days before the effective date of the termination. The Board's decision shall be final and not reviewable by any court.



Am I mistaken in thinking that the petitioners haven't read all the relevant bylaws -- or are the bylaws unclear in this situation?

#3 John Meese

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Posted 18 February 2014 - 07:06 PM

I'm sure the petitioners haven't read the bylaws, but they do have over 500 signatures (and growing). You make a good, point, though, about the founding members clause. That means I was incorrect, even if the Board of Directors voted to remove him, they couldn't do so without "cause" because he is a founding member.

Cause defined above in 5.16(b ) includes a court order of "unsound mind," a felony conviction, or a breach of Board of Director duties as outlined by the bylaws. To my knowledge, Mr. Karpeles isn't of legally unsound mind (though I may disagree with his judgement), and he is not on trial for any felony. Are there any bylaws that specifically cite a Board of Director member's responsibility in this situation?

#4 Sebastian Jurk

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Posted 18 February 2014 - 07:15 PM

I think MtGox did some really stupid and plain wrong moves. Im not sure what to think about a "founders protection".

#5 John Meese

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Posted 18 February 2014 - 07:17 PM

All I could find is this:

Section 3.2 ( b ) Industry Members. The Industry Members of the Corporation shall be corporate entities doing business in, servicing or supporting the Bitcoin system or in a similar distributed-digital currency system. The Board of Directors, in its sole discretion, may create categories of Industry Members with special rights, privileges, or duties; however, no such categories shall have any rights, privileges, or duties inconsistent with these Bylaws

Not sure if this applies here because he is a founding member, but if Mt. Gox were to collapse then the argument could be made that Mr. Karpeles' industry member standing would be in question, because he would no longer represent a corporate entity. At least one "servicing or supporting the Bitcoin system"

#6 Nicola Rebagliati

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Posted 18 February 2014 - 07:23 PM

Up to now there are two reasons people are signing this petition: the (tragic) fall of price of bitcoins on mtgox and the speculation that mtgox is insolvent. For both there are no proofs or reasons and so there is no official cause of removal from the foundation.

If the foundation decides to remove Karpeles based upon those speculations then it will actually confirm those speculations, shading more doubt and fearmongering.

Wouldn't be better to wait and to take decisions based on facts?

#7 Ryan Parker

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Posted 18 February 2014 - 09:16 PM

I agree with Nicola that it would be better to wait and make decisions on facts rather then speculation.
That being said Mark is not doing himself or Bitcoin any favors with the limited PR and vague comments in today's WSJ regarding the solvency of MtGox.


#8 Oliver Egginger

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Posted 18 February 2014 - 09:46 PM

The petition will  bring even more uncertainty into the market. The headline would have a 'nice' effect on the market. I'm pretty sure. I can not imagine that someone who is invested seriously would like to see such a petition at the present time. At least it's pure market manipulation. Do not should relevant people have the chance to publish a counter-petition?

At the moment I have truly no desire for such games. It is totally unfair to us. If there is a problem with Gox, then constructive ways must be found to resolve it. If you have no constrictive proposals, then please keep out!

I'm a long time customer of Gox (I have not taken advantage of the panic). Many sit on the fence these days and give 'wise advice' or publish such petitions. It's sad and makes me very tired.

#9 David R Allen

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Posted 18 February 2014 - 11:27 PM

I am sure Mark will be resigning soon.

#10 Steven Schram

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Posted 19 February 2014 - 02:05 AM

Implicit in the position of board member (founding no less) is the following two items. Mark has pointed out a known issue, but did so in such a way as to ensue doubt about the protocol. Board members need to realize that they serve dual masters, and clearly the needs of MtGox over-weighed those of the Foundation. Did he do the Foundation any favors here? Or did his actions injure it? Perhaps not legal cause for removal, but certainly cause for him to resign.

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#11 Larry Liu

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Posted 19 February 2014 - 03:35 AM

Why can't we wait just a little bit longer until the outcome of the whole thing becomes more clear? I feel there are simply too many unknowns to all of us at this point still.

#12 Mike Hayes

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Posted 19 February 2014 - 05:02 PM

I personally feel that this...

Karpeles irresponsibly released information stating that the issues the company were facing with withdrawals were due to "A bug in the Bitcoin software" something which was disputed by Gavin Andresen...

Is more of a serious issue than whether Mt. Gox has been losing customer money and trust.  I have in the last several weeks seen this propagated as factual through various media sources.  Yet, it is not factual.  This seems to have also been the case in the past when claims of DDOS attacks were asserted.

Also please consider the legal differences between corporate and individual entities.  Claims against the corporate entity may or may not pierce through the corporate veil to the individual.

#13 Phil Santa-Maria

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Posted 19 February 2014 - 08:18 PM

Signed.

#14 Riccardo Faggiana

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Posted 19 February 2014 - 10:03 PM

I think he should withdraw the nomination, it would be a serious detriment to the foundation!

#15 Todd Erickson

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Posted 20 February 2014 - 01:20 AM

Hmmm - So a company that has supported the Bitcoin community through blockchain forks, regulatory uncertainty and a host of other large obstacles, now finds themselves with a technical issue and a PR disaster. No one to my knowledge, AT THIS POINT has actually lost any Bitcoins and in their last announcement they will be resuming withdrawals in the next few days.

So we want someone to resign or get kicked out for having technical problems or perhaps making some public statements that he probably regrets?

I dont even know Mark but I cant see any reason for him to resign or to revoke his companies Gold Membership...at least not up to this point.

The Foundation is filled with early adopters and most are operating in very grey legal boundaries. Until someone can show me some evidence of malice or material loss, it just seems like a bad technical issue compounded by some bad PR.

#16 David R Allen

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Posted 20 February 2014 - 01:40 AM

So Todd, according to all of your very sound logic, what you are saying would mean that Mark should not step down to show respect for the Foundation.

I expect Mark is thinking about what he will do, regardless of what the foundation or its membership does.

#17 Brian Goss

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Posted 20 February 2014 - 01:52 AM

I think a little time will make everything clear. What's the rush to judgement? I think we all realize that being down two board members puts us back in the tough spot of having too few board members to make quorum without scheduling magic...I mean, that's why we had our most recent elections only a few months ago...

#18 David R Allen

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Posted 20 February 2014 - 03:09 AM

View PostBrian Goss, on 20 February 2014 - 01:52 AM, said:

I think a little time will make everything clear. What's the rush to judgement? I think we all realize that being down two board members puts us back in the tough spot of having too few board members to make quorum without scheduling magic...I mean, that's why we had our most recent elections only a few months ago...

Really? Perhaps I was too new a member to realize what was going on. Did we loose a board member before the last election?

I was under the impression we were simply in need of another representative from the "Individual" membership status, not to meet a quorum for board voting purposes.
Fortunately Elizabeth has been able to hold her industry job and handle the Education Committee handily, and from the election announcement has taken on the Secretary position as well.

One would hope that each board member would be addressing the needs of the foundation this way.

#19 Todd Erickson

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Posted 20 February 2014 - 11:15 AM

David - If Mark wants to voluntarily remove his gold membership and resign from the Board, for his own personal reasons, then he certainly should.

My point is simply that Mt Gox has supported the Bitcoin Community through years of difficult times and that if the issue at hand are truly just technical and then venting publicly, then I dont see any material reason to remove them.

Like it or not, Bitcoin gets bad press almost daily. I hear about ALL of it from Bank CEO's and Executives on every conference call that I do. This issue has not made my phone ring any more than the host of other news.

I dont believe that the Foundation's reputation (and if that matters) is in any trouble. The "Organization" is not systematically ignoring or covering up what individuals do or how Bitcoin is used. As much as I hate to say it, this will NOT be the end of bad press for Bitcoin or the Foundation, but I will withhold my "VETO" vote until there is irrefutable evidence and/or some conviction that proves wrong doing or malice.

#20 David Strayhorn

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Posted 20 February 2014 - 11:37 AM

My reading of 3.6 ( b ) is that Mark is a Founding Member and therefore could only be removed for cause, with cause defined in 5.16. However, 5.16 refers to Directors, not Members. Does the term "Director" apply to Mark?

Regardless, despite my criticisms of him elsewhere in this forum, I do not think Mark should be removed from the Board unless there is proof of fraud on his part. Right now, there is plenty of circumstantial evidence to raise suspicion of fraud, but suspicion is not proof.



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