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Darkcoin’s 5-year Struggle to Rebranding

In 2014, a story titled “Darkcoin, the Shadowy Cousin of Bitcoin, Is Booming” was released, it was about a privacy coin that sells for about $7.

Darkcoin is now called Dash. It was the first coin to integrate CoinJoin mixing, but now it is not a privacy coin. When ShapeShift delisted Dash, the group that helped run the network took the issue.

“We’ve always had a fully transparent blockchain with all inputs, outputs, amounts, addresses fully transparent,” Dash Core Group CEO Ryan Taylor stated “We’re very proud of our implementation of CoinJoin, but there’s no legal basis for treating Dash any differently than Bitcoin because it’s an identical transaction protocol.”

Darkcoin’s label is half a decade old, when DarkSend was launched, Dash’s “brand name for the specific CoinJoin implementation found in Dash’s desktop wallet.” PrivateSend is a process that users can implement before making a transaction that mixes up wallet holdings so that “an external observer is unable to determine the source of funding.”

It was the dream of Evan Duffield, Dash’s creator, who exited the company by the beginning of 2017, leaving it in the hands of the Dash Core Group.

It hasn’t done much with privacy ever since its launch, “The primary focus has kind of shifted to speed and usability as opposed to optimizing for privacy,” said Taylor. The existing privacy option, he stated, “is good enough to keep your nosy neighbor out.”

“Is it good enough to keep the CIA from analyzing your transactions with tools like Chainalysis or CipherTrace?” he continued. “No, but that’s not what this is attempting to accomplish.”

Dash attempts to accomplish becoming a daily transaction currency. It is now the 29th largest coin by market cap, which stands at $678.9M. Dash’s main growth market in Latin America, where it has taken off as a sort of alternative to Bitcoin Cash and is integrated into the payment systems for many retail and restaurant chains, like Burger King.

Taylor assessed that only 0.2% of dealings use CoinJoin on the Dash network. “You can’t use CoinJoin and transact at the same time,” he said.

The early privacy coin label has stuck although bitcoin users can do essentially a similar thing, given that they use a service like Samurai Wallet or Wasabi Wallet.

The CFO of Dash Core Group, Glenn Austin, ventured that the Department of Justice Cryptocurrency Enforcement Framework launched last month may have played a role in the ShapeShift delisting. That report stated:

“The acceptance of anonymity enhanced cryptocurrencies or ‘AECs’—such as Monero, Dash, and Zcash—by MSBs [money services businesses] and darknet marketplaces has increased the use of this type of virtual currency.”

The report further contended that the coins can help get around the anti-money laundering (AML) and combat the financing of terrorism (CFT) regulations. So, it said, “Companies that choose to offer AEC products should consider the increased risks of money laundering and financing of criminal activity, and should evaluate whether it is possible to adopt appropriate AML/CFT measures to address such risks.”

Although the report blunders by claiming that Monero, Zcash, and Dash run on “non-public or private blockchains,” some exchanges have considered the enumerated risks and deemed them not worth it.

“We are de-risking the company from a regulatory standpoint, so, for now, we are not working with those coins.”

ShapeShift’s Chief Legal Officer, Veronica McGregor

Taylor and Austin mentioned that Dash has worked with exchanges before. That includes eToroX, which delisted the coin in 2019, only to reverse the course.

Dash Core Group wants to team up with ShapeShift, too. Austin said, “We heard rumors that they were considering [delisting Dash] and reached out to [McGregor] on multiple occasions over the last few months….Unfortunately, our outreach remained unanswered. It is particularly frustrating because the delisting could have been entirely avoided by a simple 10-15 minute call.”

But it doesn’t sit well with Taylor. “The technology is technically different than Zcash or Monero, in which this information is obfuscated on the blockchain,” he said. “On Dash, it isn’t. So we have a hard time being bucketed in with Monero and Zcash as compliance risk when there is no compliance risk.”

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