From the Ministry of Foreign Affairs to Zhongnanhai! How did China hand over its former 'Bitcoin hegemon' status to the United States?
- Collusion between officials and businessmen led to the fraud of hundreds of thousands of mining machines in Germany.
- Provincial officials accepted bribes exceeding 8,000 Bitcoins.
- The world's largest BTC mining power saw its hash rate nearly drop to zero in two months.
- Over 18.7 billion yuan in liquidations within 24 hours, affecting over 430,000 people.
The true behind-the-scenes story of the 519 mining disaster that changed China's global Bitcoin status is quite lamentable.
The 45th President of the United States, the Twitter ruler, the smart king, the first cryptocurrency president in U.S. history, and the cosmic-level internet celebrity Donald Trump did something before he officially took office that no one could have anticipated, something destined to go down in history:
- Issued a Meme coin 🫨🫨
In less than 12 hours, the market value reached $4 billion, and the FDV exceeded $20 billion, making Speed Pass the second largest Meme globally after Doge 🤯🤯
With Trump's support 🇺🇸, Bitcoin and cryptocurrencies have become a national priority for the United States. Seven states have successively proposed related bills for 'strategic Bitcoin reserves', and both Bitcoin's price and market sentiment are continuously heating up.
In this Bitcoin frenzy belonging to the United States, who would have thought that China 🇨🇳 was once the country with the greatest influence in the global Bitcoin arena, and all of this changed in May 2021......
On May 18, 2021, the Internet Finance Association, the China Banking Association, and the China Payment and Clearing Association issued an announcement warning of the risks associated with virtual currency transactions, leading to a market crash that nearly halved the market, igniting panic selling.
On the same day, Inner Mongolia established a reporting platform for virtual currency 'mining' enterprises. On the evening of the 19th, Inner Mongolia again stated that the regulation of 'mining' would continue to be under high pressure, further exacerbating the collapse.
What impact did the '519' incident have on the industry?
- Bitcoin and Ethereum once nearly halved; other coins like Doge and SHIB also saw declines of 56% and 64% respectively.
- The largest digital cryptocurrency exchange in the U.S., Coinbase, experienced outages, and Binance, the largest cryptocurrency exchange globally, suspended withdrawals of Ethereum and ERC20 citing network congestion.
- Between May and July, China's share of global hash power fell from 44% to zero.
If there are a few milestone anniversaries in the history of cryptocurrency development, aside from 94, 312, the decision made on 519 is an unavoidable key date. However, few people think about it, and even fewer explore why 519 happened.
All of this behind the scenes is actually related to the fall of Jiangxi provincial officials and Fuzhou Municipal Party Committee Secretary Xiao Yi, but how does a dignified vice chairman of the provincial CPPCC and municipal party secretary get involved with Bitcoin?
The answer is a young man from Putian born in 1989—Momo ID Mole—Lin Qingxing.
"Although I am not in the rivers and lakes, the rivers and lakes have my legend."
This young man from Putian, who rewarded female streamers over 100 million on Momo, became a legendary figure in China's hacker community by 2013, and later became the chairman of Jiangxi Jiumu Group and the actual controller of Fuzhou Genesis Technology Co., Ltd.
So how did Fuzhou entrepreneur Lin Qingxing and Secretary of the Municipal Party Committee Xiao Yi lead to 519?
During Xiao Yi's tenure, he began to vigorously develop Fuzhou's digital economy and claimed to promote the digital economy as Fuzhou's core competitiveness.
But in reality, it was all about Bitcoin mining. During the tenure of Xiao Yi, Lin Qingxing's Fuzhou Genesis Company was a key enterprise in Fuzhou and received significant attention.
Spinach once visited the site, with hundreds of thousands of square meters of park and dozens of factory buildings. The most outrageous thing was that the company even had its own power station 🫨
How exaggerated was Lin Qingxing's mining park back then?
- From 2017 to 2020, electricity consumption accounted for 10% of the total in Fuzhou.
- At its peak, there were over 100,000 Bitcoin miners and over 300,000 Ethereum miners.
- Dozens of luxury cars have been parked outside the company for years, with the least impressive being Ferraris, all without plates. Even the local traffic police dare not intervene.
So how did Lin Qingxing's huge 'mining empire' collapse so suddenly?
This requires discussing how Lin Qingxing established his 'mining empire' 👀
In 2017, Lin Qingxing visited Germany with Xiao Yi, who had already made connections, and reached a cooperation agreement with GM Foundation, one of the largest blockchain technology companies in the world at that time.
Thus, the GM Foundation, together with the Fuzhou government and Lin Qingxing's company, invested billions to jointly build a 'supercomputing center park' covering hundreds of thousands of square meters, deploying hundreds of thousands of 'servers'.
Those who understand blockchain can see at a glance that this is not some supercomputing! It's just mining 🤣
What happened next was simply beyond everyone's expectations ⚠️
Just when the Germans successfully deployed hundreds of thousands of mining machines in Lin Qingxing's company park in Fuzhou under the 'sincere invitation' and policy support of the Fuzhou government.
Xiao Yi and Lin Qingxing played a black eat black game 🤯 directly cutting the Germans' mining power to their own wallets 🤯
The Germans were instantly dumbfounded 😧 Where have they seen such tactics? You big leaders come to discuss cooperation with us but treat us like monkeys?
Thus, the Germans embarked on a long 'rights protection journey' and began to file lawsuits 🤣 but the Germans continued to fight in Fuzhou for three years, but lost repeatedly 🫠
Just when the Germans realized, uh-oh! They're all in cahoots...
The national officials really couldn't hold back: 'Is it black eat black?'
Thus, the Germans ultimately pushed through diplomatic channels directly from the Ministry of Foreign Affairs to the central government, which was furious! 😡 They instructed the Central Commission for Discipline Inspection to conduct a thorough investigation!
Thus, Xiao Yi fell, and Lin Qingxing was also arrested.
Then, pulling out the radish brings out the mud, and it was discovered that there was such a giant mining site in Fuzhou, with many unsavory behaviors that the higher-ups were previously unaware of, but now everything was clear.
It is reported that during Xiao Yi's tenure, he accepted bribes exceeding 8,000 Bitcoins, which at today's price of 100,000 each amounts to 800 million dollars.....
The Germans also successfully retrieved their mining machines. Because of this incident, China's mining industry came to the attention of the highest levels of the Chinese government, and due to Xiao Yi's malicious behavior, the highest levels of China decided to rectify the entire cryptocurrency industry, with the mining sector being the most affected.
After Lin Qingxing was apprehended, the police simultaneously rushed to his mother's residence in Putian and seized several hardware wallets, including over 100,000 Bitcoins, over 300,000 Ethereum, and other vast amounts of digital currencies, which might now be worth nearly hundreds of billions of dollars.....
Looking back at the entire case, the reason for the occurrence of the 519 incident was that Xiao Yi and Lin Qingxing deceived the Germans, ultimately provoking this historical event that reached the central government.
And the 'industry earthquake' caused by these two people also changed the entire mining industry in China and its dominant position in global Bitcoin hash power, with mining sites being shut down... mining machines being exported... hash power going to zero.....
Now, we see the beautiful country across the shore leading the development of the entire cryptocurrency industry. Meanwhile, our homeland seems to be 'self-destructing', having almost no voice in this future blockchain wave, which is truly lamentable.....