As if the Bitcoin market doesn’t have enough controversy, the most prominent trade group pushing adoption of the electronic currency begins its annual conference at the same time as we prepare this report. The conference is anything but calm and collected. It is being roiled by controversy. At least 10 members of the nonprofit Bitcoin Foundation have resigned over last week’s election of onetime Disney child star and current Bitcoin entrepreneur and financier Brock Pierce as a new director, officials at the group said. Some of the members cited Pierce’s troubled past. That includes allegations in lawsuits from three employees of Pierce’s first company, bankrupt web video business Digital Entertainment Network, that he provided drugs and pressured them for sex when they were minors. Pierce has denied the accusations, which first surfaced in 2000.

While Bitcoin Foundation officials played down the defections, several members who resigned from the Foundation assailed its governance track record. “The track record of prominent Bitcoin Foundation members has been abysmal,” said Patrick Alexander, a resigning Foundation member in a post on its discussion pages. “I no longer want to be associated with these people.” Attempts to reach him for additional comment were unsuccessful. Though it is highly volatile, the value of the electronic currency in existence has skyrocketed into the billions of dollars as the number of businesses accepting it has increased and investors have sought to create new ways for it to be used. More than 1,000 Bitcoin investors, business people and enthusiasts are expected to attend the conference in Amsterdam. The programming effort that governs how Bitcoin works is led by Gavin Andresen, who is chief scientist at the Foundation and gets a salary from it. The Foundation also plays an important role for Bitcoin in lobbying on its behalf in various jurisdictions as authorities grapple with how to police the semi-anonymous currency.

Posted by dbrody