From left, Cody Wilson and Amir Taaki. Photo: Andy Greenberg
Government regulators around the world have spent the last year scrambling to prevent bitcoin from becoming the currency of choice for money launderers and black marketeers. Now their worst fears may be about to materialize in a single piece of software.
On Thursday, a collective of politically radical coders that calls itself unSystem plans to release the first version of Dark Wallet: a bitcoin application designed to protect its users’ identities far more strongly than the partial privacy protections bitcoin offers in its current form. If the program works as promised, it could neuter impending bitcoin regulations that seek to tie individuals’ identities to bitcoin ownership. By encrypting and mixing together its users’ payments, Dark Wallet seeks to enable practically untraceable flows of money online that add new fuel to the Web’s burgeoning black markets.
“This is a way of using bitcoin that mocks every attempt to sprinkle it with regulation,” says Cody Wilson, one of Dark Wallet’s two 26-year-old organizers. “It’s a way to say to the government ‘You’ve set yourself up to regulate bitcoin. Regulate this.’”
Dark Wallet was conceived last summer by Wilson and Amir Taaki. Wilson first gained notoriety by creating the world’s first entirely 3D-printed gun; Taaki is an Iranian-British free-market anarchist and developer of high-profile bitcoin projects like the decentralized online marketplace prototype DarkMarket. Together they launched a crowdfunding campaign on Indiegogo in October that raised $50,000, along with tens of thousands more in bitcoin. The accompanying video promised what Wilson described as “a line in the sand” in the struggle over bitcoin’s political future. At a debate at New York’s Museum of Modern Art in March, Wilson described his intentions for Dark Wallet more directly: “It’s just money laundering software.”
Despite those provocations, financial regulators have kept mum about the project. The New York Department of Financial Services, which held hearings about bitcoin in January and says it plans to create a “bitlicense” for some bitcoin-based businesses, didn’t respond to a request for comment. In a statement to WIRED, the Financial Crimes Enforcement Network wrote only that it’s “well aware of the many emerging technological efforts designed to subvert financial transparency. It’s certainly our business to be interested and vigilant with respect to any activities that may assist money laundering and other financial crimes.”