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Mt. Gox CEO Resigns From Bitcoin Group After Halting Withdrawals

Tibanne CEO Mark Karpeles
Mark Karpeles, chief executive officer of Tibanne Co., poses for a photograph with a bitcoin in the office operating the Mt.Gox K.K. bitcoin exchange in Tokyo on April 25, 2013. Photographer: Tomohiro Ohsumi/Bloomberg

The chief executive officer of Mt. Gox, the Tokyo-based Bitcoin exchange where prices are tumbling after it halted withdrawals, stepped down from the board of a key advocacy group for the virtual currency.

Mark Karpeles submitted his resignation from the board of directors at Bitcoin Foundation, according to a statement posted on its website by Jon Matonis, the group’s executive director.

Karpeles’ resignation is the latest setback for Mt. Gox, one of the first exchanges for the currency, after it froze withdrawals earlier this month, citing technical difficulties. Bitcoin Foundation Chief Scientist Gavin Andresen said on Feb. 10 that the exchange was to blame for the faults and it should be able to fix them on its own.

Mt. Gox Bitcoin holders offered the digital money for as little as $151 today, down from $290 late yesterday, according to the company’s website. The currency is trading at $560 on London-based Bitstamp.

Calls and e-mails to Tibanne Co., the Tokyo-based parent of Mt. Gox that is also headed by Karpeles, weren’t immediately answered.

Mt. Gox said this month that it identified a bug that enables people to withdraw the same Bitcoins more than once, leaving it vulnerable to hackers. It’s still working to resume Bitcoin withdrawals for clients, the exchange said in a statement on Feb. 20.

“The issues that Mt. Gox has been experiencing are due to an unfortunate interaction between Mt. Gox’s implementation of their highly customized wallet software, their customer support procedures and their unpreparedness,” the Bitcoin Foundation’s Andresen said this month.

Karpeles held one of three elected industry member seats on the board of the foundation, which promotes and sets technical standards for the digital money. He is the second board member to quit in less than a month.

Charlie Shrem, the chief executive officer of exchange company BitInstant, resigned after he was charged with conspiring to launder $1 million in the virtual currency.

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