A week ago, Tobias Niemiro, the co-owner of Bitmarket, Poland's second-largest cryptocurrency exchange, was shot in the head and died in his hometown;
In mid-July, Arthur Hayes, the high-profile BitMEX CEO, disappeared mysteriously because of the investigation by the Commodity Futures Commission (CFTC);
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Earlier this year, Gerald Cotten, founder of the Canadian exchange QuadrigaCX, died in India, but speculation about his fraudulently intensified.
Being shot, being supervised, being controlled, being repeatedly investigated, and being exiled globally… Although the exchange is at the top of the cryptocurrency food chain, the founders of the exchange do not need to add their own crowns, but in addition to the applause of flowers, the founder of the exchange, It can be said that it is the most dangerous occupation in the world of blockchain and cryptocurrency.
all is meant to be
The history of cryptocurrency exchanges has been written since 2006.
This year, Jed Mc Caleb, founder of the P2P transmission network “Electricity”, founded Mt.Gox.
In the beginning, Mt.Gox was just a game site. Later, Jed accidentally saw bitcoin in an article. In order to facilitate the bitcoin transaction in reality, Mt.Gox was transformed into a bitcoin exchange.
This is the budding stage of the Bitcoin exchange. One month later, Mt.Gox became the world's largest bitcoin trading platform, accounting for 70% of the global Bitcoin trading volume, and for a long time, out.
In March 2011, Jed transferred Mt.Gox to Mark Karpeles. Because Mark lives in France and is slightly fat, he is called "Fat Fat" by bitcoin enthusiasts.
Bitcoin is gradually coming out of the world of geeks. In 2013, the group purchase website “Wan Tuanwang” was founded. Xu Star, who failed in the catering O2O, after careful research, believed that Bitcoin had a promising future, so he raised 5 million yuan to establish the BitCoin trading platform OKCoin. .
Like Lin Xing, the three "wandering" is Li Lin. Li Lin, who left the company from Oracle, has made a social networking site “Friendship Network” and a group-buying website “Everyone Folds”. In 2013, he purchased the domain name “huobiwang” and founded the Bitcoin trading platform.
The fate is already doomed at this time. The fire currency network and OKCoin, which were established almost at the same time, witnessed the development history of China's cryptocurrency, which is the deadly opposite of each other and the partner of the group under the supervision.
In 2013, young people in foreign countries also noticed the blue ocean of cryptocurrency exchanges.
In Vancouver, a group of young bitcoin enthusiasts often meet and discuss issues such as Bitcoin enthusiastically. Gerald Cotton is also one of them.
“Canadian citizens don’t have many channels to buy Bitcoin. They can only transfer money to Mt.Gox in Japan and then trade.” In an interview, Gerald, 26, recalls 2013. summer.
Targeting this blank market, on Christmas 2013, Gerald and another partner co-founded the QuadrigaCX exchange.
In New York, 4,800 kilometers away from Vancouver, former derivatives trader Arthur Hayes is studying the Bitcoin white paper.
At that time, he had just been fired by Citibank, and on the Zero Hedge he heard that the price of bitcoin had rushed to $250. “Bitcoin is really cool,” he lamented and began to explore bitcoin transactions.
Unlike Li Lin and Xu Mingxing, Arthur has a wealth of knowledge of financial products and rich trading experience. He is keenly aware that futures liquidity far exceeds the stock market.
So in January 2014, he convinced two other partners to create BitMEX, a digital currency futures exchange, and officially launched its official website 10 months later.
Even now, when talking about the experience of creating BitMEX that year, Arthur Hayes still feels "very lucky."
Also in 2013, after graduating from computer science at McGill University, Canada's top university, Zhao Changpeng frequently quits around the world.
By chance, he heard about Bitcoin from a poker player and also became interested. He joined OKCoin, and Xu Xing and He Yi were called "Three Musketeers."
After the exchange was founded, as Bitcoin became more and more familiar, more and more players entered the market.
In mid-May 2013, Mt.Gox, which was taken over by Fathom, is still the world's largest bitcoin trading platform. It handles up to 80% of the total global Bitcoin transactions per day, and is therefore known by many people. "Bitcoin Tycoon."
But the world's largest bitcoin trading platform suddenly collapsed.
In November 2013, users found that it took several months to extract bitcoin on Mt.Gox. In February 2014, some media broke the news that Mt.Gox was stolen and lost 850,000 bitcoins.
A media survey found that starting in 2013, there was a person named "Willy" who created a new account every 5-10 minutes to buy Bitcoin, buying 10-20 each time. I bought about 200,000 bitcoins before and after.
It is suspected that "Willy" is the fat of the law. The chief culprit of all these is that the fat is guarded by the thief, but there is no definite evidence.
▲ Screenshot of the transaction of "Willy"
Affected by the theft of Mt.Gox, the exchanges in the market suffered a huge trust crisis. Bitcoin was also badly hurt, from the $600 at that time to $400.
Although Mt.Gox later found nearly 200,000 bitcoins in a wallet, the court and Mt.Gox have so far failed to confirm when and how the funds will be returned to the victims.
However, in the market at the time, in sharp contrast to the “deep heat” of the French fat, the founders of other exchanges ate a lot of “sweet” by the huge gap in the market, the looseness of supervision and the lack of competitors. dividend".
In order to attract more users to the Coin to trade, Li Lin exempted the Bitcoin transaction fee on September 20, 2013 (after the recovery in 2017). By the end of 2013, the cumulative trading volume of the Firecoin Network Platform reached RMB 30 billion, making it the largest digital asset trading platform in the country.
And Xu Xing is not to be outdone. He chose the Litecoin as a breakthrough in his ingenuity. In November 2013, he launched the Litecoin transaction pair, exempting the Litecoin transaction fee, and vigorously promoting it with a low price and a high profit.
It is under the strategy of Xu Mingxing that in December 2013, OKCoin announced that the amount of Litecoin transactions reached 8.5 million, and the daily processing amount reached RMB 3 billion. This was the highest record for the global digital currency trading platform at the time.
Five months later, Xu Mingxing announced that OKCoin has surpassed the Firecoin.com and became the world's number one exchange for bitcoin transactions.
In the following three years, Xu Mingxing and Li Lin have been secretly competing. The battle between the two was fierce. On October 31, 2014, Firecoin and OKCoin announced 20 times leverage on the same day.
At the same time, Gerald and Arthur in North America are also making great strides.
Vancouver also set off a bitcoin boom, and QuadrigaCX, led by Gerald, also ate the first user bonus.
In 2015 alone, QuadrigaCX handled approximately 60% to 90% of the bitcoin transactions in Canada, and QuadrigaCX became Canada's largest bitcoin trading platform.
Arthur's bitcoin futures business is getting better and better. By 2019, BitMEX handled more than 90% of the world's bitcoin futures trading and became the world's largest digital currency futures exchange.
But behind the rapid rise, the risk is creeping.
Hostility and questioning
In 2017, the “June 4th” came, and there was another major earthquake in the cryptocurrency market.
The "May 4th" policy called for the suspension of all ICO projects, and forced OKCoin, Firecoin.com, etc. to stop new users from registering and recharging. The domestic exchanges led by these two have shifted their entities overseas.
According to people familiar with the matter, during the "March 4" period, Li Lin's mental and physical condition was very bad, and he was once again suffering from depression. He also intends to sell the fire currency network, but for various reasons, the deal was not reached.
But the enthusiasm of the whole people to speculate has been ignited. By the end of 2017, bitcoin prices had reached the highest of $20,000 in history. Even after experiencing the baptism of the "March 4" a few months ago, the founders could not calm down at the time.
The rapid transfer of overseas currency security was not affected by the “Ninth Four-Year Plan”, and it successfully “received” domestic users. Through high-profile wave market marketing activities and innovative platform currency models, the currency security quickly rose in 7 Over the month of the fire currency network and OKCoin, became the world's largest exchange at that time.
The currency hits the attack, the fire currency net and OKCoin counterattack.
In December 2017, OKCoin's operator OKEx announced the completion of tens of millions of dollars in financing; from January 2018, OKCoin launched more than 20 ICO projects in a month.
From January 12th to 17th, 2018, the Firecoin Network launched 7 ICO projects within 5 days. At the same time, the number of employees of the Firecoin network rapidly expanded to 1,300, and the business layout was also expanding.
Two opponents who are not willing to show weakness and compete with each other, while expanding, have not realized that the real crisis has come so fast.
After the bitcoin price reached its peak, it fell all the way in the following year, forming a bear market for the whole year of 2018.
That is, during this period, many users of OKEx broke the news that they were frequently exposed. A large number of defenders gathered in the OKCoin Beijing headquarters building, and Xu Xuan gave a statement that even radical users should commit suicide on the spot.
▲ Defenders holding dichlorvos
▲ defenders pull up banners and claim to Xu Star
In March 2018, an article entitled "Dichlorvos sprinkled to Xu Xing" pointed out that the OKEx platform of the main body of OKCoin is suspected of data fraud and manipulation of transactions. At the same time, Xu Star, who is working for OKCoin and OKEx, is both the owner of the "casino" and the "old thousand".
Bad news came one after another. LeeEx, the CEO of OKEx, left Xu Star in May, and returned to Li Lin’s fire currency network, and invested in “enemy trenches”; plus Zhao Changpeng and He Yi’s departure, the rise of the currency security, Xu Xing was questioned “ Just arrogant, "can not retain talent."
Li Lin’s life is not good. The continuous loss of internal technical talents in the fire currency network and the continuous participation of new employees have led to a large turnover rate of the company, which in turn has resulted in inefficient departments and frequent internal corruption.
Li Lin, who originally told reporters in March that he wants to “go to a new life”, had to start mass layoffs within the company. This has also led many arbitraged employees to be very vocal about Li Lin.
At this time, Zhao Changpeng, although the days are much better than Li Lin and Xu Mingxing, but in order to evade supervision, they can only use the currency to "walk" around the world.
In March 2018, the Financial Services Agency of Japan issued a warning to the company that it was not registered in Japan. In order to avoid conflict with Japanese regulations, Zhao Changpeng had to move to Malta with the currency. Since then, Zhao Changpeng and his currency have appeared frequently in Europe, Africa and Southeast Asia.
This bear market has caused the cryptocurrency market to be badly hurt, and the founders of the exchange bear the brunt.
This year, the cryptocurrency market has broken free from the bear market, and the prices of mainstream currencies such as Bitcoin have begun to recover. But after the founders of the bear market, the challenge to face is supervision.
It is not a “one size fits all” during the “March 4th” period, but a regulation that is more prudent, meticulous, and penetrates into the blood vessels of the business.
The famous economist Dr. Nouriel Roubin has always been strongly critical of BitMEX and Arthur. At the Asian Block Summit on July 2nd, Nouriel said in a “Tangle in Taipei” debate with Arthur that Arthur founded BitMEX without meeting KYC and AML regulatory requirements.
On July 17, Nouriel again said that BitMEX was involved in a series of illegal activities, including money laundering, internal transactions and so on. Two days later, the CFTC launched a survey of BitMEX.
Arthur, who disappeared into the public's view two weeks later, suddenly appeared on Twitter on August 1st, saying that he is now trading on a yacht, the background is a tropical jungle, and he said that he will meet again in September.
▲ Arthur tweet screenshot
In China, the performance of the founders of exchanges is “controlled by the side”. For example, in the face of Sun Yuchen’s invitation to go to Buffett’s lunch, Li Lin’s words were declined. It is speculated that Li Lin is still restricted from leaving the country.
But they are not the most tormented.
Gerald and his QuadrigaCX failed to wait for the cryptocurrency recovery. On January 15, 2019, QuadrigaCX officially announced that Gerald had died unexpectedly more than a month ago, and that the platform owed creditors over RMB 1 billion could not be returned to users because they could not be taken out by the founder in a cold wallet.
As soon as the news came out, a large number of users clashed with QuadrigaCX and Gerald on social platforms such as Twitter. Some people questioned that the hospital did not disclose the details of Gerald's death; others suspected that Gerald was using a fake death to cover up the money.
On June 20, 2019, Ernst & Young accounting firm found in the investigation that Gerald had stolen user funds for margin trading and also transferred a large amount of client funds into its own account. This makes people more convinced that Gerald is arrogant.
Among the founders of many exchanges, Tobias, the co-owner of Bitmarket, Poland's second-largest cryptocurrency exchange, has the most miserable ending.
On July 25, when he was in his prime, he was shot in the head and died in the forest of his hometown. The police initially judged that it was suicide and did not rule out the possibility of homicide.
But Tobias sent a long e-mail to a businessman a few hours before his death, which said that he "found himself in a dark businessman environment" and listed some names. It is believed that Tobias is likely to die from commercial murder.
In contrast, in the eyes of the storm, Fat is now quite calm.
On March 15, 2019, the Japanese prosecutor officially announced that Fatang was sentenced to 2 years and 6 months for tampering with financial records and suspended for 4 years.
On June 5, 2019, the Japanese "Daily News" article stated that Fafa revealed that he would register a new blockchain technology company in Japan, Tristan Technologies Co., and served as the company's chief technology officer.
The fast-paced cycle, uncertain regulation, still awkward industry environment, human challenges and external threats from huge wealth are the challenges that the founders of cryptocurrency exchanges face at all times.
In addition, they are enjoying all the dividends of a fast-rising and information-asymmetric industry.
A set of data can prove:
OKCoin's revenue for the full year of 2018 was US$420 million; the net profit of the second quarter of 2019 was over US$100 million; the second quarter of the Firecoin network was US$270 million…
"If you want to wear a crown, you must bear the heavy weight." The opportunity of the era of cryptocurrency may be a turning point in life, or it may be a gift that secretly marks the price.
Text / 31QU small shell