Recently, the Bitcoin Foundation announced that it would be forming committees "to offer help and guidance to businesses and individuals in the digital currency space." Its new Executive Director, Jon Matonis, wrote on the Foundation's blog, "we intend to file amicus briefs in significant bitcoin-related legal cases and to offer pro bono legal defense where appropriate." I don't know Matonis—I don't even own a fraction of a Bitcoin—but when he announced that the Bitcoin Foundation had received a cease and desist order from the since-renamed California Department of Financial Institutions (DFI), he referenced an article I wrote before my company brought a constitutional challenge against the California Money Transmission Act.

As an interesting side-note, the DFI is now part of the DBO, or the Department of Business Oversight, which also has a new Commissioner, Jan Owen. You may not recognize Commissioner Owen's name, but you might know her former employer, Washington Mutual. According to her official biography, Commissioner Owen worked at WaMu as an internal lobbyist until 2008, when her efforts helped cause the largest bank failure in United States history. Now she oversees all of California's banks and corporations.

I was glad to see the Bitcoin Foundation recognizing the importance of engaging government officals, especially given that most of them readily admit that they don't know much about virtual currencies or payment innovations. So I sent an e-mail to Executive Director Matonis, asking him if the Bitcoin Foundation would be filing an amicus brief in Think Computer Corporation v. Venchiarutti, et al—the only court case ever to challenge the constitutionality of money transmission laws. (For those who don't know, an amicus brief is a paper filed by a party not directly involved in a case, but who still wants to formally throw in their two cents.) Ever since the Department of the Treasury's FinCEN division issued its Guidance FIN-2013-G001 in March, 2013, money transmission laws have been rather relevant to Bitcoin. They have already negatively impacted companies familiar to Bitcoin enthusiasts, such as Mt. Gox and Dwolla.

Much to my surprise, the answer was no. The Bitcoin Foundation apparently had no interest in expressing any opinion on money transmission laws in the single federal case pending that could decide their fate nationwide.

The reason? Apparently, me.

Although I am not at all involved with Bitcoin as a consumer (I've never bought them and rejected the one Bitcoin tip I surprisingly received), merchant (I don't sell them), or exchange operator (nor do I exchange them), I am also definitely not impartial in this situation. That's because my company is suing, among other illegal money transmitters, a number of Bitcoin-related companies that haven't been following the law. Needless to say, the unfair competition dynamic that has been building for years has had a negative impact on my business. Essentially, increasingly well-funded entrepreurs race to break the law as fast as they can, while I (however foolishly) plod to Sacramento to try to fix the system within the bounds of the laws we have. What's especially interesting about this dynamic is that the circle of individuals involved is pretty small—small enough that there are some overlaps. For example, Peter Vessenes, the Bitcoin Foundation's former Executive Director, and present Chairman of the Board and Treasurer, is also the CEO of CoinLab, Inc., one of the companies ignoring money transmission laws, which Think is suing.

You might think I'm jumping to conclusions by assuming that the Bitcoin Foundation won't file the most important amicus brief it could possibly file in defense of Bitcoin just because my company is also suing the company run by its former Executive Director. But I'm not assuming that, because current Executive Director Matonis replied to my e-mail. On July 10, 2013, he wrote, "I don't think so Aaron. Our chairman is still upset that you sued Coinlab. —Jon".

I suppose that were I in Peter Vessenes's position, I'd be upset, too. After all, shouldn't all of us payment innovators be helping each other out? The answer of course is yes, but that's not what anyone is doing. On behalf of Think, I've been to Sacramento three times to fight companies thousands of times larger than mine, and I haven't seen a single other entrepreneur there except for one, Ron Garret, whose startup never came to fruition because of the MTA. So while I am suing my competitors for operating illegally, including CoinLab, I'm also doing their dirty work for them.

There's a more important issue here, however, which is that the Bitcoin Foundation has applied for 501(c)3 tax exempt status as a legal entity independent of CoinLab, Inc. or any profit motive with goals that are obviously not the same as those of CoinLab, Inc. What's good for CoinLab may not be good for the Bitcoin Foundation and vice-versa. I'm not suing the Bitcoin Foundation because it hasn't broken the law (even if California is confused on this point). In this case, it seems pretty clear that what is good for the Bitcoin community, and therefore the Bitcoin Foundation as well, is a more rational money transmission framework. Unfortunately, with conflicts of interest as large as these, the Bitcoin community shouldn't count on its so-called Foundation, or its multitude of new committees, to help.

What the community can count on is increased regulatory scrutiny. And that probably means more court involvement, but not of the kind I've initiated. Unless the Bitcoin Foundation acts, and maybe even if it does, it's only a matter of time before criminal charges are filed against someone with Bitcoin ties.

Those committees better get to work.