Abstract
Dash is NOT an anonymity-enhanced cryptocurrency.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
DCG is distinct from the Dash network, and is one of the many entities serving that network. DCG is the largest software development organization for the Dash network and is primarily tasked with development of the protocol. We also engage in business development and marketing efforts that benefit the network. Other software development teams independent of DCG also perform work for the network.
- 2.
In addition to FinCEN’s NPR, the U.S. Department of Justice recently issued an influential report that publicly (and erroneously) named Dash as an AEC that employs “non-public or private blockchains that make it more difficult to trace or to attribute transactions,” “may undermine the AML/CFT controls used to detect suspicious activity by MSBs and other financial institutions, and may limit or even negate a business’s ability to conduct AML/CFT checks on customer activity and to satisfy B[ank] S[ecrecy] A[ct] requirements.” U.S. Department of Justice, Cryptocurrency Enforcement Framework (Oct. 2020) at 4, 41, available at: https://www.justice.gov/ag/page/file/1326061/download.
- 3.
For example, the popular Investopedia website lists Dash as the “#3” “privacy-oriented cryptocurrency,” whose “PrivateSend feature” supposedly “obscur[es] the origin of your funds”-though the website does acknowledge that certain settings allow for users “to remain within their countries’ regulatory standards.” Investopedia, “Six Private Cryptocurrencies,” available at: https://www.investopedia.com/tech/five-most-private-cryptocurrencies/ (last updated Dec. 24, 2020). For the reasons expressed in this letter, Investopedia’s characterization is mistaken. We address the “PrivateSend” feature later in the text of this letter.
- 4.
Chainalysis, “Introducing Investigation and Compliance Support for Dash and Zcash,” June 8, 2020, available at: https://blog.chainalysis.com/reports/introducing-chainalysis-investigation-compliance-support-dash-zcash.
- 5.
Id. (emphasis added).
- 6.
See, e.g., U.S. Dep’t of Justice, Press Release, “United States Files A Civil Action To Forfeit Cryptocurrency Valued At Over One Billion U.S. Dollars,” Nov. 5, 2020, available at: https://www.justice.gov/usao-ndca/pr/united-states-files-civil-action-forfeit-cryptocurrency-valued-over-one-billion-us (thanking Chainalysis by name); U.S. Dep’t of Justice, Press Release, “Global Disruption of Three Terror Finance Cyber-Enabled Campaigns,” Aug. 13, 2020, available at: https://www.justice.gov/opa/pr/global-disruption-three-terror-finance-cyber-enabled-campaigns (same); U.S. Dep’t of Justice, Press Release, “Three Individuals Charged For Alleged Roles In Twitter Hack,” July 31, 2020, available at: https://www.justice.gov/usao-ndca/pr/three-individuals-charged-alleged-roles-twitter-hack.
- 7.
See Bitcoin Transaction through PrivateSend: https://btc.cryptoid.info/btc/tx.dws?2e9aa4e7c7aa704055adc7ce396533164a097515189a30f1e9c8fa73b21dc174.html.
- 8.
See links to Dash PrivateSend transactions for comparison to Bitcoin “PrivateSend” transactions here at: https://chainz.cryptoid.info/dash/tx.dws?a8656b7655c14445c652d8e5e27a6155e8a39aa792f99210607437737999a945.html.
- 9.
See Erik Silfversten, et al., Exploring the use of Zcash cryptocurrency for illicit or criminal purposes,” Rand Corp., 2020, at 23 (Fig. 3.7), available at: https://www.rand.org/pubs/research_reports/RR4418.html. As this report observes, “[S]ome commentators believe that due to their privacy enhancing features, altcoins such as Zcash (as well as Monero, Dash and Litecoin) represent notable competitors for Bitcoin with illicit users on the dark web.” Id. at 12. The report concludes, however, that “little empirical evidence or research exists in support of this claim.” Id. While we would disagree with the ill-informed commentators referenced in the report, who believe, without evidence, that Dash is an “altcoin” whose users tend towards criminality, we concur fully with the report’s assessment that the use of Dash on illicit darknet marketplaces is negligible.
- 10.
Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), “Money laundering and terrorist financing indicators—Virtual currency transactions,” Dec. 2020, available at: https://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/indicators-indicateurs/vc_mltf-eng.
- 11.
Nasdaq, “Bittrex to Delist ‘Privacy Coins’ Monero, Dash and Zcash,” Jan. 1, 2021, available at: https://www.nasdaq.com/articles/bittrex-to-delist-privacy-coins-monero-dash-and-zcash-2021-01-01; see also Bittrex, “Pending Market Removals 01/15/21,” Jan. 1, 2021, available at: https://bittrex.zendesk.com/hc/en-us/articles/360054393492-Pending-Market-Removals-01-15-21.
- 12.
Id.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 International Financial Cryptography Association
About this paper
Cite this paper
Taylor, R. (2021). Re: FinCEN Docket Number FINCEN-2020-0020; RIN 1506-AB47; Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets. In: Bernhard, M., et al. Financial Cryptography and Data Security. FC 2021 International Workshops. FC 2021. Lecture Notes in Computer Science(), vol 12676. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-63958-0_4
Download citation
DOI: https://doi.org/10.1007/978-3-662-63958-0_4
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-662-63957-3
Online ISBN: 978-3-662-63958-0
eBook Packages: Computer ScienceComputer Science (R0)