by Steven Musil

February 23, 2014

Embattled Bitcoin exchange Mt. Gox has resigned from the board of the Bitcoin Foundation, the organization that manages the crypto-currency.

The resignation is effective immediately, according to a terse announcement made late Sunday by the foundation.

"We are grateful for their early and valuable contributions as a founding member in launching the Bitcoin Foundation," the foundation wrote, promising that further details and procedures for electing a replacement would be forthcoming.

The resignation comes amid a dispute between Mt. Gox and the Bitcoin Foundation regarding an issue that forced the exchange to suspend customer withdrawals earlier this month, citing a glitch in the way the currency handles transactions paid out to digital wallets held by third parties.

Mt. Gox has maintained that a fundamental flaw existed in Bitcoin that affected all transactions that should be addressed by the Bitcoin Foundation. However, the Bitcoin Foundation countered that the issue originated with the exchange's wallet service, customer support procedures, and an unpreparedness for transaction malleability.

The value of the virtual currency plummeted on Mt. Gox after the exchange announced on February 7 that it would pause customer withdrawals to address the issue. However, a week after the exchange apologized for the suspension and said it had developed a workaround that would allow it to resume withdrawals soon, customers are still unable to withdraw their funds from the exchange.

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