Xiao Sa's team: reviewing the brief history of BTC's 14-year legal development
Original Author: Xiao Sa Legal Team
Original source: WeChat public account - Xiao Sa lawyer
This article is the first brief legal history of Bitcoin.
Since January 4, 2009, Satoshi Nakamoto created the Bitcoin creation block Block #0 in a small server in Helsinki, Finland, and dug out the world's first 50 Bitcoins. Bitcoin has gone 14 years passed. Sister Sa's team, as a professional legal team that focused on virtual currency and blockchain technology in the early days in China, has witnessed the rise and fall of Bitcoin along the way.
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Events: Satoshi Nakamoto publishes "Bitcoin: A Peer-to-Peer Cash Payment System"
The year 2008 is extremely special and full of memories, both for China and the world. That year, the subprime mortgage crisis that originated in the United States evolved into a global international financial crisis, and the financial turmoil swept every corner of the world. In that year, Wenchuan, my country suffered a once-in-a-thousand-year earthquake disaster, and the hearts of 1.3 billion Chinese people were closely connected; In the front is another deceased legend who can crack open walnuts; in that year, China held the Olympic Games for the first time, and the fireworks on the Bird's Nest in Beijing, like the vigorous vitality of China at that time, became the most vivid symbol of the Chinese dream. Express……
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Milestones: Genesis Block Birth, Bitcoin Flourishing
On January 3, 2009, Satoshi Nakamoto created the first block in the Bitcoin world - the "Genesis block" (Genesis block), and created the world's first 50 Bitcoins , and left the first message on the blockchain: "TheTimes 03/Jan/2009 Chancellor on brink of second bailout for banks" ("On January 3, 2009, the British Chancellor on the brink of second bailout for banks" ”) This was the headline of The Times that day, when the world financial crisis was under the wave, and the British Chancellor of the Exchequer, Darling, was considering a second rescue of the banking crisis. Looking back now, this is not only a proof of the creation time of the genesis block, but also a mockery of the inevitable financial crisis in the centralized financial system and the inherent drawbacks of the old world banking system.
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Milestones: $100 million pizza and the first hard fork
In this year, the milestone event is the famous Bitcoin "buy pizza" event. In 2010, Laszlo Hanyecz (Laszlo Hanyecz), who lives in Florida, USA, successfully used 10,000 bitcoins to purchase a pizza. This is the first time in history that someone successfully used bitcoins to successfully purchase physical goods in the real world , converted at today's bitcoin price, this is a pizza worth 160 million US dollars (about 1.1 billion yuan).
On August 6, 2010, a major vulnerability in the Bitcoin protocol was discovered: Transaction information was not properly verified and included in the transaction record or "blockchain", allowing users to bypass Bitcoin's authentication mechanism to create countless Bitcoins . On August 15, this vulnerability was exploited maliciously, generating 184.4 billion bitcoins and sending them to two bitcoin addresses. This vulnerability was quickly discovered, and the Bitcoin network protocol also ushered in the first hard fork upgrade, which successfully resolved the crisis. Since then, this method has been used for reference by the Ethereum network and has affected the development process of Web3 history. It is worth mentioning that it was in this year that the most notorious bitcoin trading platform in history, Mt. Gox, was launched, which paved the way for the bitcoin crash a few years later, and its far-reaching impact has not subsided until today.
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Chronicle of Events: The Silk Road of the Dark Net was launched, and the supervision of virtual currency began
It is not an exaggeration to say that 2011 is the beginning of the legal supervision of virtual assets. Thanks to the raging dark web and the three technical characteristics of virtual currency itself, anonymous payment, decentralization and non-tamperable modification, transaction subjects are more It is difficult to determine and trace, and the investigation of related cases is extremely difficult. The crime of virtual assets has become a place where the legal profession has been aware of, and it has begun to discuss the anti-money laundering supervision of virtual assets in a real sense.
In February 2011, the most notorious darknet Silk Road (Silk Road) in history that used Bitcoin for transactions was launched. The owner is Dread Pirate Roberts. Silk Road is a black market shopping website that uses Bitcoin for transactions and operates on Tor's covert service. In this black market, almost all kinds of contraband can be bought, including but not limited to drugs and controlled substances, guns and weapons, child pornography videos, high-value artworks, stolen jewelry, etc. arrive. According to media reports, most of the sellers are from the UK and the US.
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Memorabilia: The Chinese government first issued a regulatory document related to Bitcoin, clarifying the nature of Bitcoin
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Chronicle of Events: Mt.Gox Mentougou Crash
Mt.Gox (also known as Mentougou) is a bitcoin exchange created by American programmer Jed McCaleb, which was later bought by others and moved its headquarters to Tokyo. At that time, Mt.Gox was the largest Bitcoin exchange in the world, monopolizing 80% of global Bitcoin transactions, and the infamous Mt. Gox crash was the first center in Bitcoin history caused by a hacker attack. Exchange crashes.
February 7, 2014: Mt.Gox suspended all bitcoin withdrawal services, claiming a system loophole, and all bitcoin withdrawal services have been suspended since then. February 23, 2014: Mark Karpelè resigns as a member of the Bitcoin Foundation Board of Directors. On the same day, Mt.Gox deleted all posts on its social platforms. On February 24, 2014, Mt. Gox suspended all trading activities and the exchange was completely offline. According to media reports, 744,408 bitcoins were stolen by hackers in Mentougou, which has become insolvent and completely collapsed. February 28, 2014: Mt.Gox filed for bankruptcy protection in Tokyo, and then on March 9, filed for bankruptcy protection in the United States.
It was precisely because of the Mentougou incident that the bitcoin market experienced violent shocks. Thousands of investors’ bitcoins evaporated. The price of bitcoins fell by 36% in a short period of time. The market once fell to freezing point. This is the first time in the development of bitcoins A major crash event. After this battle, it took several years for Bitcoin to revive market confidence. At the same time, it also sounded the alarm for regulators, and virtual currency regulation was put on the agenda by various countries. Especially in the field of tax law regulation, the Internal Revenue Service (IRS, hereinafter referred to as the "Internal Revenue Service") of the US Federal Department of the Treasury began to establish a taxpayer reporting system in the field of digital currency in 2014. The system aims to incorporate digital currency-related transactions into the tax regulatory system at the federal level.
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Memorabilia: The world's first Bitcoin regulatory measures were introduced & Ethereum was launched
On June 3, 2015, after experiencing the aftermath of the Mentougou incident, the New York State Department of Financial Services announced a series of regulatory regulations for companies providing bitcoin and digital currency services, which stipulates that companies providing services to New York State residents must be within 45 days. Apply for a "BitLicense" license. This series of regulations is the first government regulatory regulation specifically targeting digital currency business in history. In response, several of the largest bitcoin exchanges at the time, including Bitfinex, Kraken, and ShapeShift, announced the suspension of services to New York State residents, a license requirement that continues to this day.
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Memorabilia: Bitcoin ransomware virus is rampant
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Chronicle of Events: 9.24 Announcement, Virtual Currency Withdrawal from Mainland China
During this period, my country's virtual asset supervision has realized the transformation from "implicit prohibition" to "comprehensive prohibition". After the above-mentioned "Notice on Preventing Bitcoin Risks" issued in 2013, my country's regulatory agencies actually believed that: "Bitcoin and other so-called virtual currencies have increasingly become tools for illegal and criminal activities such as money laundering, drug trafficking, smuggling, and illegal fund-raising. Be vigilant and report to the police immediately if you find clues to illegal and criminal activities.” At this stage (before 2021), my country can be included in the countries that adopt an implicit prohibition attitude towards digital currency-related transactions.
The landmark time node for the transformation is September 24, 2021. On the same day, 11 departments including the National Development and Reform Commission issued the "Notice on Rectifying Virtual Currency Mining" Activities (hereinafter referred to as the "NDRC Notice"), announcing that virtual currency "mining" activities will be officially listed as an eliminated industry. At the same time, 10 departments including the People's Bank of China issued the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" (hereinafter referred to as the "Notice of the Central Bank"), clarifying that virtual currencies do not have the same legal status as legal tender, and related business activities It is an illegal financial activity. Since then, mining activities have been completely prohibited and banned in mainland China, and all virtual currency trading platforms have stopped all financial activities in mainland China and targeting users in mainland China. Under this move, many famous trading platforms have left their hometowns. Most of them started to seek development in Gebipo County.
This document is a sign of my country's transition from implicit prohibition to comprehensive prohibition of virtual currency.
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Memorabilia: Luna plummeted, Sanjian & FTX both went bankrupt, and the currency circle ushered in the second ice age
After experiencing the prosperity in 2021, encrypted assets started with the plunge of the stablecoin TerraUSD and its sister token Luna in May 2022, which opened the second large-scale ice age in the currency circle since the Mentougou incident in history. Due to the collapse of the entire cryptocurrency market by Terra and Luna, it led to the bankruptcy of the tens of billions of venture capital companies in the currency circle founded by Zhusu and KylesLdavies: Three Arrows Capital went bankrupt. According to media reports, on July 1, Three Arrows Capital went bankrupt in the Southern District of New York The court filed for bankruptcy protection and has accumulated billions of dollars in bankruptcy debt. After this battle, not only the virtual currency was hit hard, but the price of Bitcoin once plunged off a cliff, and has not recovered so far.
At the end of 2022, when we thought that the currency circle had fallen to the freezing point and every step in the future would develop for the better, FTX told us with actions: the situation will never be the worst, it will only get worse. On November 11, during China’s Double Eleven Shopping Festival, FTX, the world’s second largest virtual currency trading platform, announced through social media that the company and other affiliates of the FTX Group have initiated voluntary bankruptcy proceedings in accordance with relevant US laws. FTX founder and CEO Sam Bankman Fried (SBF) has resigned, and the new CEO is bankruptcy lawyer John J. Ray.
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write at the end
The fourteen years of Bitcoin are not only the fourteen years of ups and downs for encrypted assets, but also the fourteen years of the development of my country's digital economy. The Olympic fireworks in 2008 reflected the glory of China in the next decade, but now we are ushering in a more challenging era. It can be said that Bitcoin is not only an influencer of changes in the world's economic and political structure in recent years, but also a witness of the times By. Sister Sa's team is a legal service team that grew up with virtual assets, especially Bitcoin, and will also devote itself to the service wave of financial innovation and technological innovation in the future. In any case, tomorrow will still come, and we look forward to witnessing the next ten-year legend of Bitcoin.
