ShapeShift is a cryptocurrency exchange that recently dropped three private coins: Dash, Zcash ZEC, as well as Monero XMR. This was a surprising decision considering the business’s long-standing dedication to confidentiality.
Shapeshift did not enforce user identity restrictions on traders in its initial periods as a noncustodial site. However, it began to change in 2018 with the progressive adoption of a required subscription model that complied with Know Your Customer standards.
Glenn Austin, the finance director of Dash Core Group, said in a message to Cointelegraph that the revocation was particularly disappointing when a simple 10–15 minute phone call could totally prevent it.
Austin feels the blacklisting is a result of a lack of knowledge while not yet formally stating the grounds for the revocation. Austin believes the fact that the currency cited repeatedly in the Department of Justice’s newly released Cryptocurrency Enforcement Framework impacted the decision.
Dash was mentioned with Monero and Zcash as an illustration of an anonymity-enhanced cryptocurrency on both occasions. The Department of Justice has designated the usage of such currencies as a high-risk activity that could indicate illegal activities.
Dash claims that their cryptocurrency isn’t really a private coin. According to the organization, the common idea that Dash is a privacy-coin is likely a vestige of its prior Darkcoin appellation. But it does not adequately represent its true capabilities.
Prominent legal firm Perkins Coie in September 2019 stated this. According to Perkins Coie, Dash will have the same capabilities as Bitcoin BTC in this sense.
Off-chain operations, hiding addresses or quantities, Mimblewimble, collapsing, and Coinjoin are among the privacy-enhancing methods that may apply on top of any public blockchain, according to Austin.
CoinJoin is the sole privacy option available in Dash wallets for now. A large number of Bitcoin wallets support CoinJoin.
Dash’s misunderstandings
From a technological aspect, Chainalysis is a major blockchain analytics organization. It agrees that the term privacy currency is a misrepresentation for Dash. Self-governing wallet software allows more complex types of CoinJoin utilized with large cryptocurrencies not classified as privacy coins.
These include Bitcoin, Bitcoin Cash, as well as Litecoin. As per the business, they provide research and regulatory assistance for the Dash Core Group.
Austin further took this argument. Beyond his focus on Dash’s misunderstandings, he claims that Bitcoin’s support of off-chain transactions via Lightning Network. As well as its ubiquity in darknet markets makes it a bigger concern from a legal standpoint.
Furthermore, he claims that Dash wallets cannot use the software Chaumian and CoinJoin can. This is a more complex way of hiding information from other network members.
Austin stated that they presented all of these facts to FinCEN, but that message never made it to the Department of Justice. ShapeShift has also been contacted, and the company claims it will keep pursuing the situation until its rectification.
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