Cryptocurrency is a decentralized digital currency operating independently of central authorities like governments or banks. It leverages a computer network to facilitate and validate transactions. Its key features include decentralization, transparency (through blockchain technology), and often, pseudonymity. Cryptocurrencies offer an alternative to traditional financial systems, with use cases ranging from payments to investments. The value of cryptocurrencies can be highly volatile, and its regulatory landscape is still evolving globally.
In 1983, David Chaum conceived ecash, a type of cryptographic electronic money.
In 1995, David Chaum implemented Digicash, an early form of cryptographic electronic payments requiring user software to withdraw notes from a bank and designate specific encrypted keys before sending them to a recipient, making the digital currency untraceable by a third party.
In October 1996, the National Security Agency (NSA) published a paper titled "How to Make a Mint: The Cryptography of Anonymous Electronic Cash" on an MIT mailing list, describing a cryptocurrency system.
In April 1997, the National Security Agency's paper "How to Make a Mint: The Cryptography of Anonymous Electronic Cash", which describes a cryptocurrency system, was published in The American Law Review.
In 1998, Wei Dai described "b-money", an anonymous, distributed electronic cash system.
In 1999, the dot-com bubble was compared to digital currencies, as Howard Marks of Oaktree Capital Management likened digital currencies to unfounded fads or pyramid schemes, comparing them to historical financial bubbles like the tulip mania (1637), South Sea Bubble (1720), and the dot-com bubble (1999) in 2017.
In 2008, Satoshi Nakamoto, the founder of Bitcoin, expressed that cryptocurrencies align well with the libertarian viewpoint.
In 2008, bitcoin was innovated which had an early network effect.
In January 2009, bitcoin was created by pseudonymous developer Satoshi Nakamoto using SHA-256 in its proof-of-work scheme.
In 2009, bitcoin was first released as open-source software, marking the birth of the first cryptocurrency.
Since bitcoin's introduction in 2009, an arms race for cheaper-yet-efficient machines has existed.
Since the inception of bitcoin in 2009, concerns have grown that the unregulated nature of cryptocurrencies may become a threat to society, enabling anonymous web criminals.
In April 2011, Namecoin was created as an attempt at forming a decentralized DNS.
In October 2011, Litecoin was released, which used scrypt as its hash function instead of SHA-256.
Between 2011 and 2019, reported cybersecurity breaches at exchanges ranged from four to twelve a year.
In 2011, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
In August 2012, Peercoin was created, using a hybrid of proof-of-work and proof-of-stake.
In October 2013, the original Silk Road, an online black market using cryptocurrency, was shut down, leading to an increase in prominent dark markets and drug listings in the following year.
In 2013, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
In February 2014, Jordan Kelley launched the first bitcoin ATM in the United States, located in Austin, Texas. The ATM used scanners to verify users' identities via government-issued IDs.
In February 2014, Mt. Gox, the world's largest bitcoin exchange, declared bankruptcy after claiming to have lost nearly 750,000 bitcoins due to theft. The price of bitcoin fell from approximately $1,160 in December to under $400 in February as a result.
On March 25, 2014, the United States Internal Revenue Service (IRS) ruled that bitcoin will be treated as property for tax purposes, subjecting virtual currencies to capital gains tax.
On 6 August 2014, the UK announced its Treasury had commissioned a study of cryptocurrencies and what role, if any, they could play in the UK economy, along with whether regulation should be considered.
In 2014, Gareth Murphy, a senior banking officer, expressed concerns that widespread cryptocurrency adoption could obfuscate economic data. Unlike traditional financial products, cryptocurrencies lack strong consumer protections, such as chargebacks for fraud.
In 2014, Homero Josh Garza founded the cryptocurrency startups GAW Miners and ZenMiner, which were later acknowledged to be part of a pyramid scheme.
In 2014, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
In September 2015, the academic journal Ledger was established by the University of Pittsburgh, covering studies of cryptocurrencies and related technologies.
In 2015, Homero Josh Garza pleaded guilty to wire fraud in connection with his cryptocurrency startups GAW Miners and ZenMiner.
From 1 January 2016 to 30 June 2017, Proof-of-work blockchains such as bitcoin, Ethereum, Litecoin, and Monero were estimated to have added between 3 million and 15 million tons of carbon dioxide (CO2) to the atmosphere.
In 2016, Ethereum had the largest "following" of any altcoin, according to the New York Times.
From 1 January 2016 to 30 June 2017, Proof-of-work blockchains such as bitcoin, Ethereum, Litecoin, and Monero were estimated to have added between 3 million and 15 million tons of carbon dioxide (CO2) to the atmosphere.
In September 2017, China banned Initial Coin Offerings (ICOs), which caused a decrease in cryptocurrency returns initially, but the liquidity effect became positive after the news.
On November 21, 2017, Tether announced that it had been hacked, resulting in the loss of $31 million in USDT from its core treasury wallet.
On December 19, 2017, Yapian, the owner of South Korean exchange Youbit, filed for bankruptcy after suffering two hacks that year. Customers were granted access to 75% of their assets.
On December 7, 2017, Slovenian cryptocurrency exchange Nicehash reported that hackers had stolen over $70 million using a hijacked company computer.
In 2017, Howard Marks of Oaktree Capital Management likened digital currencies to unfounded fads or pyramid schemes, comparing them to historical financial bubbles like the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999).
In 2017, a paper by John Griffin and Amin Shams suggested that the price of Bitcoin had been substantially inflated using the cryptocurrency, Tether.
In 2017, an increase in cryptocurrency mining significantly increased the demand for graphics cards (GPUs) driving up prices and causing shortages due to their suitability for generating hashes.
In 2017, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
In 2017, the money laundering risk was seen as low.
In January 2018, Japanese exchange Coincheck reported that hackers had stolen cryptocurrency worth $530 million.
As of February 2018, the Chinese government has halted trading of virtual currency, banned initial coin offerings, and shut down mining.
In March 2018, the city of Plattsburgh, New York put an 18-month moratorium on all cryptocurrency mining in an effort to preserve natural resources and the "character and direction" of the city.
In March 2018, the word "cryptocurrency" was added to the Merriam-Webster Dictionary, signifying the increasing recognition and mainstream awareness of the term.
In May 2018, Bitcoin Gold had its transactions hijacked and abused by unknown hackers. Exchanges lost an estimated $18 million, and Bitcoin Gold was delisted from Bittrex.
In June 2018, Hydro Quebec proposed to the provincial government to allocate 500 megawatts of power to crypto companies for mining.
In June 2018, South Korean exchange Coinrail was hacked, leading to a loss of over $37 million in crypto and worsening a cryptocurrency selloff by an additional $42 billion.
On July 9, 2018, the exchange Bancor, had $23.5 million in crypto stolen.
On September 13, 2018, Homero Josh Garza was sentenced to 21 months of imprisonment after acknowledging that his cryptocurrency startups GAW Miners and ZenMiner were part of a pyramid scheme. He had pleaded guilty to wire fraud in 2015.
In 2018, a legislative ICO working group in Switzerland began issuing legal guidelines to remove uncertainty from cryptocurrency offerings and establish sustainable business practices, following requests from industry representatives.
In 2018, an increase in crypto-related suicides was noticed after the cryptocurrency market crashed in August. The situation was particularly critical in Korea as crypto traders were on "suicide watch".
In 2018, bitcoin's design caused a 1.4% welfare loss compared to an efficient cash system, while a cash system with 2% money growth has a minor 0.003% welfare cost. The main source for this inefficiency is the large mining cost, which is estimated to be US$360 million per year.
In 2018, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
In 2018, the Bank for International Settlements highlighted several criticisms of cryptocurrencies, including price instability, high energy consumption, transaction costs, poor security, fraud, vulnerability to debasement, and the influence of miners.
In 2018, the UK published its final report on cryptocurrencies, commissioned by the Treasury, examining their potential role in the UK economy and considering possible regulations.
By July 2019, bitcoin's electricity consumption was estimated to be approximately 7 gigawatts, around 0.2% of the global total, or equivalent to the energy consumed nationally by Switzerland.
In 2019, FINMA, the Swiss regulator, issued its own guidance to VASPs following the FATF's Recommendation 16, with stricter requirements for verifying the identity of the beneficiary of the transfer.
In 2019, more than a billion dollars worth of cryptoassets was reported stolen, with the stolen assets typically ending up in illegal markets.
In 2019, studies indicated that up to 80% of trades on unregulated cryptocurrency exchanges might be wash trades. Bitwise Asset Management reported that 95% of Bitcoin trading volume on CoinMarketCap was artificially generated.
In May 2020, the Joint Working Group on interVASP Messaging Standards published "IVMS 101", a universal common language for communication of required originator and beneficiary information between VASPs.
In June 2020, FATF updated its guidance to include the "Travel Rule" for cryptocurrencies, requiring VASPs to obtain, hold, and exchange information about the originators and beneficiaries of virtual asset transfers.
In September 2020, the European Commission published a digital finance strategy, including a draft regulation on Markets in Crypto-Assets (MiCA) to provide a regulatory framework for digital assets in the EU.
As of December 2020, the IVMS 101 data model has yet to be finalized and ratified by the three global standard setting bodies that created it.
A 2020 EU report found that users had lost crypto-assets worth hundreds of millions of US dollars in security breaches at exchanges and storage providers.
A 2020 study presented different attacks on privacy in cryptocurrencies and suggested several different ideas, including new cryptographic schemes and mechanisms for hiding the IP address of the source in order to improve privacy.
According to a 2020 report produced by the United States Attorney General's Cyber-Digital Task Force, the majority of illicit cryptocurrency uses fall into three categories: financial transactions associated with crimes, money laundering, and crimes directly implicating the cryptocurrency marketplace itself.
According to the UK 2020 national risk assessment, the risk of using cryptoassets such as bitcoin for money laundering and terrorism financing is assessed as "medium."
As of 2020, it was possible to arbitrage to find the difference in price across several crypto marketplaces.
In 2020, Paul Vigna of The Wall Street Journal described altcoins as "alternative versions of Bitcoin" given its role as the model protocol for cryptocurrency designers. As of early 2020, there were more than 5,000 cryptocurrencies.
In 2020, the dark web marketplace Hydra, which is powered by cryptocurrency, facilitated over $1 billion in sales, channeling dark money into Russia. The platform required sellers to liquidate cryptocurrency through specific regional exchanges, complicating tracing efforts.
Since 2020, RenBridge, an unregulated service for blockchain transfers, was found to have laundered at least $540 million, commonly used to launder money from theft, including the Liquid crypto exchange cyberattack linked to North Korea. This information was uncovered in 2022.
As of 10 January 2021, all cryptocurrency firms operating in the UK market were required to register with the Financial Conduct Authority (FCA).
In January 2021, Mirror Trading International disappeared with $170 million worth of cryptocurrency in South Africa.
In January 2021, the UK issued a consultation on cryptoassets and stablecoins following its 2018 report on cryptocurrencies.
On 11 February 2021, BNY Mellon announced its plan to begin offering cryptocurrency services to its clients.
In March 2021, South Korea implemented new legislation to strengthen oversight of digital assets, requiring registration with the Korea Financial Intelligence Unit and adherence to security and customer verification standards.
On 17 March 2021, Morgan Stanley became the first major Wall Street bank to offer access to Bitcoin funds for their wealthy clients through three funds that enable Bitcoin ownership for investors with a high risk tolerance.
In April 2021, the founders of Africrypt, Raees Cajee and Ameer Cajee, disappeared with $3.8 billion worth of Bitcoin in South Africa's largest cryptocurrency scam.
On 20 April 2021, Venmo added support to its platform, enabling customers to buy, hold, and sell cryptocurrencies.
In May 2021, a study of the six largest proof-of-stake networks concluded and identified six "environmentally friendly" cryptocurrencies: Chia, IOTA, Cardano, Nano, Solarcoin and Bitgreen.
On 18 May 2021, China banned financial institutions and payment companies from providing cryptocurrency transaction-related services, leading to a sharp fall in the price of major cryptocurrencies such as Bitcoin, Ethereum, Binance Coin, and Dogecoin.
On May 2021, the Department of the Treasury announced that it would require any transfer worth $10,000 or more to be reported to the Internal Revenue Service (IRS) due to concerns about illegal activity like tax evasion facilitated by cryptocurrency.
In June 2021, El Salvador became the first country to accept bitcoin as legal tender after the Legislative Assembly voted 62-22 to pass a bill submitted by President Nayib Bukele.
In June 2021, cryptocurrency began to be offered by some wealth managers in the US for 401(k)s.
On 10 June 2021, the Basel Committee on Banking Supervision proposed that banks holding cryptocurrency assets must set aside capital to cover all potential losses, requiring full coverage.
On 27 June 2021, the UK's Financial Conduct Authority (FCA) demanded that Binance cease all regulated activities in the UK.
In July 2021, Senator Elizabeth Warren wrote to the chairman of the SEC demanding answers on cryptocurrency regulation due to the increase in cryptocurrency exchange use and the danger this posed to consumers.
In August 2021, Cuba followed El Salvador by recognizing and regulating cryptocurrencies such as bitcoin with Resolution 215.
On August 2021, SEC Chairman Gary Gensler responded to Warren's letter, calling for legislation focused on "crypto trading, lending and DeFi platforms." He also criticized stablecoins and argued that many tokens may be unregistered securities.
In September 2021, the Chinese government declared all cryptocurrency transactions illegal, completing its crackdown on cryptocurrency.
In October 2021, Mastercard announced a partnership with Bakkt to create a platform allowing banks and merchants on the Mastercard network to offer cryptocurrency services.
In October 2021, a paper by the National Bureau of Economic Research revealed that Bitcoin suffers from systemic risk, with the top 10,000 addresses controlling about one-third of all Bitcoin in circulation, and 0.01% of miners controlling 50% of the capacity.
In October 2021, the first bitcoin-linked exchange-traded fund (ETF) from ProShares started trading on the NYSE under the ticker "BITO." According to ProShares CEO Michael L. Sapir, the ETF would expose bitcoin to a wider range of investors.
In December 2021, Monkey Kingdom, an NFT project based in Hong Kong, lost US$1.3 million worth of cryptocurrencies via a phishing link used by the hacker.
According to blockchain data company Chainalysis, criminals laundered US$8,600,000,000 worth of cryptocurrency in 2021, up by 30% from the previous year. Almost $2.2bn worth of cryptocurrencies was embezzled from DeFi protocols in 2021, which represents 72% of all cryptocurrency theft in 2021.
At the end of 2021, the total value of all cryptocurrencies reached $2 trillion.
Blockchain analysis company Chainalysis concluded that illicit activities made up only 0.15% of all crypto transactions conducted in 2021, representing a total of $14 billion.
In 2021, Federation Tower in Moscow was identified as a hub for cryptocurrency businesses suspected of money laundering, including Garantex, Eggchange, Cashbank, Buy-Bitcoin, Tetchange, Bitzlato, and Suex, with Suex being sanctioned by the U.S.
In 2021, Kazakhstan became the second-biggest crypto-currency mining country, producing 18.1% of the global exahash rate.
In 2021, a Polytechnic University of Catalonia thesis broadened the definition of altcoins to include every cryptocurrency other than bitcoin.
In 2021, approximately 74% of ransomware revenue, exceeding $400 million in cryptocurrency, was attributed to software strains likely associated with Russia, where oversight is limited.
In 2021, concerns about environmental emissions led to a backlash against Bitcoin donations. Some agencies stopped accepting Bitcoin, including the U.S. arm of Greenpeace after seven years, citing that the amount of energy needed to run Bitcoin became clearer, this policy became no longer tenable."
In 2021, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
In 2021, research by the UK's financial regulator indicated that consumer warnings about cryptocurrency were often unheard or ignored. A significant portion of crypto users were unaware of the lack of statutory compensation, wrongly assumed cryptocurrencies were regulated, and were influenced by social media and competition with peers.
In 2021, various countries had differing stances on cryptocurrency, with some explicitly allowing use and trade, while others imposed bans or restrictions. An absolute ban applied in 9 countries including Algeria, Bangladesh, and China, and an implicit ban in 39 others. Regulators in the United States and Canada investigated "Bitcoin scams" and ICOs in 40 jurisdictions.
In a January 2022 interview, Tobias Adrian of the IMF stated the need for a coordinated, consistent, and comprehensive approach to supervising cryptocurrencies globally.
On February 2022, the Department of Justice named Eun Young Choi as the first director of a National Cryptocurrency Enforcement Team to address misuse of cryptocurrencies and other digital assets.
On March 9, 2022, President Biden issued Executive Order 14067, Ensuring Responsible Development of Digital Assets.
In April 2022, Virgil Griffith, a computer programmer, received a five-year prison sentence in the US for attending a Pyongyang cryptocurrency conference, where he presented on blockchains and potential sanctions evasion.
In May 2022, the collapse of the Luna currency operated by Terra led to reports of suicidal investors in crypto-related subreddits.
On 11 May 2022, Terra's stablecoin UST experienced a significant crash, falling from $1 to 26 cents.
In June 2022, Bill Gates stated that cryptocurrencies are "100% based on greater fool theory".
On July 7, 2022, the Department of the Treasury released its Framework for International Engagement on Digital Assets.
In September 2022, South Korean prosecutors requested the issuance of an Interpol Red Notice against Do Kwon, the founder of Terraform Labs, following the failure of Terra and Luna coins.
On 15 September 2022, Ethereum, the world's second-largest cryptocurrency at the time, transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as "the Merge", which according to the Ethereum Founder, would cut both Ethereum's energy use and carbon-dioxide emissions by 99.9%.
On September 16, 2022, the Comprehensive Framework for Responsible Development of Digital Assets document was released to support development of cryptocurrencies and restrict their illegal use.
On 11 November 2022, FTX Trading Ltd., a cryptocurrency exchange valued at $18 billion, filed for bankruptcy, impacting the broader financial landscape. Following the collapse of FTX, financial industry executives emphasized the need for regulators to protect crypto investors, while technology analyst Avivah Litan highlighted the necessity for significant improvements in user experience, controls, safety, and customer service within the cryptocurrency ecosystem.
In 2022, RenBridge, an unregulated service for blockchain transfers, was found to have laundered at least $540 million since 2020, commonly used to launder money from theft, including the Liquid crypto exchange cyberattack linked to North Korea.
In 2022, following Western nations' economic sanctions on Russia after the invasion of Ukraine, American sources warned in March that some crypto-transactions could potentially be used to evade these economic sanctions against Russia and Belarus.
In 2022, the Ukrainian government successfully raised over US$10,000,000 worth of aid through cryptocurrency following the Russian invasion of Ukraine.
In early 2022, only four of the top cryptocurrencies identified in January 2018 by value remained in the top 10. The cryptocurrency sector became intertwined with capital markets.
In February 2023, the SEC ruled that cryptocurrency exchange Kraken's staked assets operated as an illegal securities seller. Kraken agreed to a $30 million settlement and to cease its staking service in the US.
In February 2023, the median transaction fee for Ether corresponded to $2.2845, while for bitcoin it corresponded to $0.659.
On March 23, 2023, the SEC issued an alert to investors stating that firms offering crypto asset securities might not be complying with US laws.
As of June 2023, the cryptocurrency marketplace had grown to include more than 25,000 different cryptocurrencies, with over 40 having a market capitalization exceeding $1 billion, marking a significant expansion of the cryptocurrency ecosystem.
On November 2, 2023, Sam Bankman-Fried was pronounced guilty on seven counts of fraud related to FTX.
A 2023 IMF working paper found that crypto mining could generate 450 million tons of CO2 emissions by 2027, accounting for 0.7 percent of global emissions, or 1.2 percent of the world total
In 2023, Hong Kong is shaping its expected regulatory framework for stablecoins, which includes a few considerations.
In 2023, LiteBit, previously headquartered in the Netherlands, was forced to cease all operations on August 13th, "due to market changes and regulatory pressure".
In 2023, cryptocurrency experienced a bubble and market crash, marking one of several periods of growth and retraction.
On March 28, 2024, the court sentenced Sam Bankman-Fried to 25 years in prison.
In April 2024, TVNZ reported that the Cook Islands government was proposing legislation to allow "recovery agents" to investigate and recover cryptocurrency used for illegal activities, which was criticized for being potentially unconstitutional and involving conflicts of interest.
In May 2024, 15 years after the creation of Bitcoin's blockchain, the US Congress advanced the Financial Innovation and Technology for the 21st Century Act to the full House of Representatives, aiming to provide regulatory clarity for digital assets.
On 30 June 2024, the EU regulation Markets in Crypto-Assets (MiCA) covering asset-referenced tokens (ARTs) and electronic money tokens (EMTs), also known as stablecoins, came into force.
In November 2024, the incoming Labour government confirmed that it would proceed with the regulation of cryptoassets.
As of 30 December 2024, the rest of MiCA came into force, covering crypto-assets other than ART and EMT and CASPs. MiCA excludes crypto-assets if they qualify as financial instruments according to ESMA guidelines published on 17 December 2024 as well as crypto-assets that are unique and not fungible with other crypto-assets.
By mid-2024, Dogecoin's value plunged to 13 cents after a record-high of 73 cents.
As of 17 January 2025, the European Securities and Markets Authority (ESMA) issued guidance to crypto-asset service providers (CASPs) allowing them to maintain crypto-asset services for non-compliant ARTs and EMTs until the end of March 2025.
On January 23, 2025, President Donald Trump signed Executive Order 14178, Strengthening American Leadership in Digital Financial Technology, revoking Executive Order 14067 of March 9, 2022, Ensuring Responsible Development of Digital Assets and the Department of the Treasury's Framework for International Engagement on Digital Assets of July 7, 2022. The order also prohibits the establishment, issuance or promotion of Central bank digital currency and establishes a group tasked with proposing a federal regulatory framework for digital assets within 180 days.
The European Securities and Markets Authority (ESMA) issued guidance to crypto-asset service providers (CASPs) allowing them to maintain crypto-asset services for non-compliant ARTs and EMTs until the end of March 2025.
In April 2025, the estimated market capitalization of the cryptocurrency market reached $2.76 trillion, indicating substantial growth and investment in the cryptocurrency sector.
In 2026, new UK requirements regarding the regulation of cryptoassets are expected to come into force.
A 2023 IMF working paper found that crypto mining could generate 450 million tons of CO2 emissions by 2027, accounting for 0.7 percent of global emissions, or 1.2 percent of the world total
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