Mt Gox chief Mark Karpelès steps down from Bitcoin Foundation board

Mark Karpelès, chief executive officer of Mt Gox, the embattled Toyko-based bitcoin exchange, stepped down from the board of the Bitcoin Foundation, yesterday, The Wall Street Journal reported citing a person familiar with the situation.

Mark KarpelèsConfirming the development on its website in a statement, the foundation thanked Mt. Gox for its efforts in launching the group.

The move comes after a series of long-standing technical issues came to the fore last summer when Mt. Gox halted customer withdrawals in US dollars.

The problems worsened earlier this month when Mt. Gox suspended all customer withdrawals, saying a bug in the software for bitcoin allowed alteration of transactions by some users (See:Bitcoin falls after Mt Gox closes indefinitely).

The problems led to CoinDesk removing Mt Gox from its bitcoin-pricing index earlier this month and the exchange told customers last week that it was still working on "reinitiating" bitcoin withdrawals.

Karpeles' resignation had been sought by many investors in the bitcoin community, which included a British-based marketing consultant who has posted an online petition calling for Mr Karpelès's removal.

Mt Gox (the full name of which is "Magic The Gathering Exchange") is one of the industry representatives on the board of the Bitcoin Foundation, which is advocating the virtual currency.

Another prominent member Charles Shrem, made an exit earlier this year after his arrest in connection with an alleged drug scheme involving his bitcoin currency exchange (Bitcoin exchange chief arrested for money laundering).

Bitcoin prices have been rapidly declining after Mt. Gox said a "bug in the bitcoin software" could allow transaction details to be altered (Bug hits Bitcoin for Android).