# Elena Nadolinski I Why Crypto has No Privacy Layer I Iron Fish I Pragma Denver 2024

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2024-10-09
- Duration: 23:05
- Topics: crypto privacy, Iron Fish, Elena Nadolinski, pragma denver, zk privacy, private transactions, OFAC, FinCEN, privacy layer, MSB, compliance, web3 privacy, Tornado Cash, zksnarks, privacy protocols, regulatory risk, decentralized finance, usdc private transfer, crypto compliance, real-time threat detection, privacy pools, crypto regulation, privacy in blockchain, anonymous crypto, use case privacy, privacy layer crypto, zk rollups, privacy enforcement
- Watch: https://streameth.org/watch/yt--946rlEfbxs
- YouTube: https://www.youtube.com/watch?v=-946rlEfbxs

## Description

Why doesn’t crypto have a privacy layer—yet? In this candid and technically rich talk at Pragma Denver 2024, Elena Nadolinski, founder of Iron Fish, dives into the state of privacy in crypto and the complex regulatory, technical, and ethical hurdles developers face.

Elena explores past and current privacy protocols including Zcash, Monero, Nocturne, Namada, Penumbra, Tornado Cash, and Iron Fish itself. She breaks down why many attempts at privacy have failed or been abandoned, and how compliance with entities like OFAC and FinCEN further complicates innovation.

You’ll learn about the critical distinction between ingress, internal transfers, and egress in privacy protocols, and why Iron Fish is pursuing real-time threat detection and centralized screening at ingress as a practical and compliant path forward.

00:00 Intro to crypto privacy challenges
01:08 What is Iron Fish and why privacy matters
02:08 Why private transactions are essential
03:09 Use cases: whales, payroll, donations, phishing
04:15 Goal: send USDC privately from A to B
04:51 Overview of privacy protocol categories
05:23 Problems with Zcash, TEEs, pivots, and delays
06:26 Tornado Cash: demand, sanctions, and legacy
07:01 The privacy protocol “squid game” dilemma
07:36 Compliance matters more than tech alone
08:10 Key US regulators: FinCEN and OFAC
09:14 FinCEN guidance and MSB designation risks
10:30 Tornado Cash trial and MSB criteria
11:43 Fee structures, tokens, and regulatory exposure
12:17 Why OFAC is the scarier threat
13:27 Tornado Cash and OFAC contradictions
14:01 Developers’ personal liability under OFAC
14:36 Sanctioned funds and direct fee exposure
15:06 Bridges, sequencers, and MSB-like risks
15:41 Three stages of a privacy protocol: ingress, internal, egress
16:44 Screening at protocol level vs inside privacy pool
17:45 Tracer model for note ownership is impractical
18:48 Global blocklists and jurisdictional conflicts
19:50 Association sets and their privacy tradeoffs
21:26 Why ingress screening is most practical
21:57 Using allow/block lists and threat detection
22:28 Real-time monitoring through bridge operators
23:02 Final thoughts and Iron Fish roadmap update

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  

🇺🇸 *Pragma Denver*
Pragma Denver 2024 took place at The Arch in Denver on February 28, 2024, and was an in-person summit for builders and leaders in the web3 ecosystem. Pragma is a one-stage conference with founders-only on stage, bringing together a small group of curated attendees and speakers to discuss the future of web3 and reflect on the past. Watch the full Pragma Denver playlist here: https://youtube.com/playlist?list=PLXzKMXK2aHh4lJw0vruQ4prh8iMDUk89i&si=ayJ64Sgcqew1fdFk

ETHGlobal's Pragma series takes place in cities around the world, and is designed to be a different kind of event. Ever since we first introduced our new event series, Pragma, in Tokyo in the spring of 2023, we have been fostering a curated, global community of individuals who deeply care about web3. 

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  

✅ *Follow Elena Nadolinski*
X: https://x.com/leanthebean

✅ *Follow Iron Fish*
X: https://x.com/ironfishcrypto

✅ *Follow ETHGlobal*
X: https://x.com/ETHGlobal​
Warpcast: https://warpcast.com/ethglobal
Website: https://ethglobal.com
YouTube: https://www.youtube.com/c/ETHGlobal 

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  

_Are you interested in Ethereum development and entrepreneurship?_
👉 Sign up for the next ETHGlobal event: https://ethglobal.com/events
🎁 Get exclusive access and perks with ETHGlobal Plus! https://ethglobal.com/plus
📣 Want us to throw an event in your city? Tell us where! https://ethglobal.com/city

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _