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 Webs 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 Wallets two 26-year-old organizers. Its a way to say to the government Youve set yourself up to regulate bitcoin. Regulate this.

Heres a teaser video the group posted earlier last week ahead of the softwares release:

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Dark Wallet Is About to Make Bitcoin Money Laundering Easier Than Ever