The Bitcoin Foundation, a trade group composed of hundreds of individuals and companies involved in the cryptocurrency’s promotion, has been hit with at least a dozen resignations in the wake of the election of a new controversial board member. The board is the most public face of Bitcoin and acts as the governing body for the Bitcoin Foundation, making executive decisions on behalf of its members.

Last Friday, American entrepreneur Brock Pierce was elected as one of two new board members to the body, which now comprises seven people, recently expanded from five.

Fifteen years ago, Pierce cofounded a Southern California startup called Digital Entertainment Network . Despite raising tens of millions in venture capital, that company eventually went under. Not long before the company was slated to have its initial public offering in 1999, Pierce and two other cofounders were named in two civil lawsuits alleging sexual abuse of underage boys. Pierce was never charged criminally.

One of those cofounders, Marc Collins-Rector, is now a convicted sex offender, having pleaded guilty to related charges in two states.

Pierce also did not respond to a 2013 civil lawsuit filed against him by UBS Bank for having run up an unpaid credit card bill of over $120,000. UBS won that lawsuit in November 2013 by default.

Neither the Bitcoin Foundation nor Pierce immediately responded to Ars’ request for comment.

However, Pierce told Reuters, "The allegations against me are not true, and I have never had intimate or sexual contact with any of the people who made those allegations.”

Pierce is also one of the leaders of a new firm, Sunlot Holdings Limited, which has moved to buy the beleaguered Mt. Gox. The once-largest Bitcoin exchange collapsed earlier this year and has filed for bankruptcy protection in Japan and the United States. Pierce is most famous for having been a child actor in The Mighty Ducks film series. In subsequent years, he became involved in a number of tech startups, including Internet Gaming Entertainment.

“I no longer want to be associated with these people”

In a public post on the Bitcoin Foundation’s website, many members expressed their displeasure at Pierce’s election.

Patrick Alexander wrote:

Unfortunately I must resign as an individual member of the Bitcoin Foundation. Reasons are many, but the following are salient: Charlie Shrem engaging in alleged money laundering and associated crimes.

Mark Karpeles misappropriating people's money to the tune of millions.

Brock Pierce being associated with alleged pedophilia. (Now newly elected to an industry seat) This is not the direction this foundation needs to take. The foundation members need to emulate very high moral values and ethics in business and in personal dealings, especially as it involves money. So far, the track record of prominent Bitcoin Foundation members has been abysmal. I know that most foundation members are probably swell people and are not like this. However, the acts of a few have overshadowed us all unfortunately. I no longer want to be associated with these people.

Olivier Janssens, wrote:

I am also resigning as a lifetime member. If the bitcoin foundation is to be taken seriously, they need to immediately remove Brock Pierce from the board and save face. Brad, there are plenty more allegations than what you brought up. There are active lawsuits on corporate fraud and child porn. This is NOT the type of associations you want to have for Bitcoin, especially not with the [mainstream media] trying to pull every stunt in the book.

Some, like Sandy Ressler, said they would stand by the group and its choice to elect Pierce:

I will NOT be resigning my (annual) membership and I congratulate the two new Board Members. They appear to have the energy and commitment to move Bitcoin forward. I also think it's really bad form to base decisions on rather thin allegations, I thought this was supposed to be a tolerant community. I wish the Bitcoin Foundation a long life.

Lawsuits continue

According to the Los Angeles Times, Marc Collins-Rector was forced to leave the company after a lawsuit accused him of molesting a New Jersey teenage boy, which he denied. By October 1999, Collins-Rector settled the case. Chad Shackley, another cofounder along with Collins-Rector and Brock Pierce, subsequently left the company. (Shackley lived with Collins-Rector since dropping out of high school.)

After the settlement, Collins-Rector, Shackley, and Pierce fled to Spain as a second set of victims filed another lawsuit in California against the three alleging sexual abuse. The three men never responded to the case, and a judge awarded a default judgment and $4.5 million in damages.

In 2000, a federal prosecutor in New Jersey brought further criminal charges against Collins-Rector on five counts of transporting a minor across state lines for illegal sexual activity—but he was already out of the country.

The three were arrested in Spain in 2002 and Collins-Rector was extradited to the United States. Federal prosecutors in Los Angeles brought new criminal charges against Collins-Rector in 2004. Although they were named in the original New Jersey civil lawsuit, Shackley and Pierce were never charged.

According to the Times, by 2006 Collins-Rector pleaded guilty in both cases and was sentenced to time served plus three years of supervised release. As of 2008, Collins-Rector listed his place of residence as the Dominican Republic on the Florida sexual offender registry.

More recently, the California man who brought the civil suit against Collins-Rector, Shackley, and Pierce has come forward as Michael Egan, now aged 31.

In April 2014, Egan brought a new lawsuit against four men, including X-Men Director Bryan Singer and three Hollywood executives, alleging that he was coerced to have sex with them at Collins-Rector and Shackley’s estate 15 years ago and on a private estate in Hawaii. All four men have denied the accusations.