Building Institutional Rails On-chain — A Conversation with Canton Co-founder Shaul Kfir

Ari Redbord (00:02):

I'm Ari Redbord and this is TRM Talks. I'm Global Head of Policy at TRM Labs, we provide blockchain intelligence software to support law enforcement investigations and to help financial institutions and cryptocurrency businesses mitigate financial crime risk within the emerging digital asset economy. Prior to joining TRM spent 15 years in the US federal government, first as a prosecutor at the Department of Justice, and then as a Treasury Department official where I worked to safeguard the financial system against terrorist financiers, weapons of mass destruction proliferators, drug kingpins, and other rogue actors. On TRM Talks, I sit down with business leaders, policymakers, investigators, and friends from across the crypto ecosystem who are working to build a safer financial system.

(00:53):

On today's TRM Talks, I sit down with Shaul Kfir, the co-founder of the Canton Network. But first, inside the lab, where I share data-driven insights from our blockchain intelligence team. On today's Inside the Lab, we summarize TRM's report entitled Russia Leveraging Kurjistan's Crypto Ecosystem to Evade Sanctions. Since Kurjistan enacted its on virtual assets law in January 2022, the country's crypto sector has grown rapidly. By October 2024, Kurj regulators had issued 126 VASP licenses, virtual asset service provider licenses, and on- chain activity at license providers jumped from roughly 59 million US in 2022 to about $4.2 billion in the first seven months of 2024. That rapid expansion has created both legitimate opportunity and new abuse vectors. TRM's analysis identifies a pattern of Russia-linked actors exploiting Kurj registered platforms to move funds, and in some cases, procure dual use goods. Several Kurj vasts show hallmarks of shell company behavior, repeated use of the same residential addresses, phone numbers, and emails tied to logistics firms, named founders with no clear crypto operating history and weak user registration processes.

(02:25):

On-chain heuristics at a number of these exchanges overlap with those previously associated with the sanctioned Russian exchange Grantex. After Grantex's takedown, platforms such as GrinX and MIR saw immediate volume spikes and facilitated withdrawals using the A7A5 stablecoin. TRM also documents specific linkages, exposures between courged wallets and addresses tied to sanctioned entities. For example, wallet activity connected to the Rusic Group and simultaneous registration patterns. In one instance, both Occurge Exchange and the issuer of a Russia link stablecoin were registered within weeks of each other. TRM's report lays out practical steps for mitigation, tightening vast registration and ownership rules, increasing transparency of funding resources, and ultimate beneficial owners, and strengthening supervisory scrutiny to detect networks of Shell entities. And now, Shaul Kfir. Today, I am joined by Shaul Kfir, the co-founder of Digital Asset. Shaul, I have been wanting to have this conversation for a while, mostly because Canton has really become such an important part of the conversation, whether it's institutional adoption or really just the growth of the space more broadly.

(03:49):

So super psyched for this conversation today, and thanks so much for joining TRM Talks.

Shaul Kfir (03:54):

Likewise, thank you for having me. It's great to be here.

Ari Redbord (03:56):

So really before we dig in on what you've built and really what it means for this space, would love to hear about your journey. Can you talk a little bit about what led you to found digital asset and really build the Canton network?

Shaul Kfir (04:10):

Yeah, actually, so I got involved in the crypto space from two different directions, and it happened in parallel. First of all, I was just always fascinated by cryptography, popular science books, the code book by Simon Singh. And so I remember just being interested in that whole area since forever. When I was in university, I was studying physics and computer science, and I gravitated naturally into the fixtic side into quantum cryptography and quantum information systems. And then at university, I met a professor there, Eli Ben-Sasson, who many of your listeners may know is the CEO of Starkware. And he was researching a niche area of cryptography called PCP, zero knowledge, proofs, snarks, starks. And he was talking about the idea that you can prove things about computation. It just sounded fascinating. So I really got kind of hooked on that specific niche of cryptography, and it had nothing to do with cryptocurrencies.

(05:08):

This was before I ever heard about Bitcoin. We were doing this around ... I heard about this from him around 2010 and joined him in 2011 to work on this. So that was one area, and that eventually turned into an area that became a very hot topic in the blockchain world. And in parallel, I actually don't remember when the first time was that I heard about Bitcoin, but I started getting very interested around 2012. And that was in parallel to doing this very advanced cryptography and math with Eli and his team. I came across the Bitcoin white paper for a second time, and it just fascinated me the idea of progremable money over the internet. And I kind of came of age during the decentralization era with email. I remember the first time of emailing, and I remember the launch of the Worldwide Wab. I've been blogging and Napster and BitTorrent, and this just felt like a natural progression of like, okay, money over the internet.

(05:58):

And it also seemed so simple and elegant after doing this advanced cryptography, nine pages of a white paper can beautifully explain in a very simple manner how you can do money over the internet. So I got really interested in that, and it was just very hard to buy Bitcoin at the time. So that was my first exposure of just trying to buy Bitcoin, realizing it's so hard. And that kind of naturally moved me into my first startup in the space, which was a Bitcoin brokerage in Israel, just to make it accessible and easy to go and buy Bitcoin. That's how I get started.

Ari Redbord (06:25):

That's an amazing answer. Was there a point where you had read the Bitcoin white paper, really obviously this still high level document and connected it to the work you were doing on zero knowledge proofs and quantum?

Shaul Kfir (06:40):

I don't think it was immediate. I don't actually remember exactly that connection was immediate, but it came soon thereafter. So it was very clear. I got pulled into this Bitcoin rabbit hole very quickly, and I do remember very quickly feeling this problem of just everything being transparent. It is a problem, and people were talking about that very much on the forums, on IRC, on Bitcoin talks. So it wasn't just this ... Everyone was learning how to further anonymize Bitcoin, how to make it less transparent. At the time, the work we were doing on snarks and stocks, we weren't thinking about the zero knowledge aspects. We were thinking about it from the compression of computation and not the privacy that you get out of that. But in 2013, we realized that you can use this to scale Bitcoin. And Eli went to the Bitcoin San Jose conference in 2013, and we presented this idea on how do you use advanced cryptography to scale Bitcoin.

(07:36):

And at the same conference, there was another group that was talking about how to do anonymous Bitcoin. It was called Zerocoin at the time. And those two things together became the precursor to cache, which was how do you take both the scaling technology and the zero knowledge aspects that you get out of that scale technology and meet, and you can create an actual very scalable and private coin. So it was quite quickly after reading the Bitcoin white paper.

Ari Redbord (08:00):

What's so extraordinary about this space, and even to me, and in my little policy, illicit finance world, it is such a small group of people who are building this still today. At some point, that will obviously have to change, but it's crazy to hear that you were at a conference with the founder of Digital Asset yourself, Starkware and Zcash. And it was probably a relatively small conference. I mean, that is amazing to think about. We're still in that world in many respects, but man, that must have been a really early experience in the sort of privacy meets Bitcoin space.

Shaul Kfir (08:33):

Many of the people who are leading the biggest companies today were in that space in that era. And I know them from when it was a very small scale community and everyone knew everyone, either in person or by their handle for those who never came to the conferences. But yeah, it is amazing.

Ari Redbord (08:47):

Amazing. So tell me how, in terms of that journey, you started this Bitcoin company, and then ultimately what came next?

Shaul Kfir (08:55):

So very quickly into building that, the kind of things that we came across were we had to integrate with regulators, with the anti-money laundering authorities in Israel, with the bank security teams, we had to integrate with banks just in terms of moving money and converting Israeli Sheko into US dollars or euros and moving them across the border. And it was amazing to see that the easiest parts of what we did was the crypto side. Now that may be because of my background, but that was actually, securing the Bitcoin was easy, moving cryptocurrency was easy. The hard thing was anything that had to do with interacting with the banks, anything that had to do with interacting with the regulators and institutions. And very quickly, it became apparent that you can use this technology to improve other systems. Now, I do think I was very naive at the time in my thinking about how a bank or how a regulator works.

(09:47):

I think that naivete was a benefit because I probably wouldn't have started what we started with knowing how complex it is, but it was very clear that you can actually apply these same principles and technologies, even if not one for one, the exact same technology, you can apply it to problems in different domains.

Ari Redbord (10:04):

And out of that grew Digital Asset? Yeah.

Shaul Kfir (10:05):

So Digital Asset came out of that and it came out of a few different ideas, but first and foremost, it was how do you reduce the risk, first of all, even for cryptocurrency exchanges. So the crypto world was really reinventing a lot of things that were already mature in the financial world. And these are the things that I started learning over time building that brokerage, a lot of things that I didn't know about how clearing and settlement works, how trading actually works. My co-founders, Yuval Rooz and Eric Saraniecki, they came from DRW. So they were very well versed in the trading world and understood how wholesale finance works. And we were realizing, okay, on the one hand, you really need to mature how the whole crypto space works. So it's just reinventing the wheel and introducing a huge amount of risk. So if you subscribe like us to the view that cryptocurrency would be a big thing, then it really needs to mature.

(10:52):

And on the other side, there was what we completely understood already, this idea of you can have atomic transactions and reduce the risk in the traditional finance world if you can start doing atomic transactions between different asset classes. So there's a capital allocation for the purpose of clearing and netting, those are things that you can really make much more efficient by taking these ideas of having a platform where you can do atomic transactions across different assets. So with those two ideas, those were kind of the two ideas together that came and with them about doing digital asset. Plus people were already starting to talk about these kinds of ideas in the space of generalizing Bitcoin into Ethereum. Ethereum wasn't launched at this time yet, but there was Mastercoin before that. There was a counterparty. We were really surprised that no one was talking about some of the more enterprisey things like privacy.

(11:40):

Everyone needs privacy. We were already thinking about that and we were really surprised to see that all these new platforms launching or that were being announced didn't even take that into account as something that needs to be to exist in order for these kind of platforms to take off. So that was our hypothesis.

Ari Redbord (11:55):

Let's back up for a second, sort of talk more high level. I talk all the time about the radical transparency essentially of open public ledgers and our ability to trace and track and do compliance in ways that we never had before. But the reality is that you have to be grounded in the fact that privacy is going to be incredibly important for this ecosystem is important today, and I think becoming more important as more people transact on open public ledgers. Talk to me a little bit about that idea, that view of the world that I think you've sort of always held.

Shaul Kfir (12:24):

Actually, I'll say there were a few aspects that we thought would be important, and privacy was one of them. Today it's the one that I think is capturing the most attention, but there were other things, and I could talk about them as well. But the idea that you would transact on a completely public ledger that everyone can see everything you're doing, that was just very clearly a nonstarter. That's something that no business would really conduct all of its business on top of a transparent ledger. So that was very clear to us from the start that we need to find some solution of building a blockchain that has all of the properties that you expect of a public blockchain, including the self-custodialship that you can control your own assets, your own keys, the atomic transactions that you have where you can compose different applications, but it had to have privacy ingred that only those parties to a transaction that should see that data will see that data.

(13:11):

And we came from the background of understanding privacy from the zero knowledge proof side and both understanding the tools that existed to do that in the requirement that brought us to believe that we can be the ones to go and build that kind of blockchain.

Ari Redbord (13:26):

I need to know those other things now.

Shaul Kfir (13:28):

Well, there are a few. So first of all, on the security side, it was very clear that there were just enormous gaps in how things were being secured at the time in the cryptocurrency space. So every financial institution has their own way of managing their assets, their own way of managing their keys. They always have some mechanisms to recover their data and their keys. And it was very clear that we need to mature that space, the security space for financial institutions, for any kind of institutional company to use blockchains. Another very big one was the user experience. To do anything in any blockchain at that time around 2013, 2014, later 2015, you had to really be an expert in both cryptography and distributed systems to get to do anything right without introducing insane bugs and vulnerabilities. And it was very clear to us that you have to have a user experience, a developer experience that doesn't force the developer to be an expert in all of these domains.

(14:23):

So I'd say when we started out, that was actually a bigger focus for us than privacy. Privacy was one of these table stakes that we knew we just had to have. But I'd say the first few years of Kenton Digital Asset was really focused on how do you enable a developer to build the correct application, the business logic that they expect to build without having to be an expert in these very complex domains in cryptography and distributed systems and computer security.

Ari Redbord (14:46):

Makes sense. Tell me about Canton. You built it, I think with all of these concepts in mind. First of all, the name, what's the genesis of the name?

Shaul Kfir (14:56):

So the genesis of the name is both a homage to the place where it was created and to the technology. So the way we thought of a blockchain is that you would have different applications and every application has much more control than in typical public blockchains of who can see what, who can see the data by application, who has the rights to do what in that application. Hanthon is a public blockchain, but the big difference from most public blockchains is that every application has this level of control, has this level of control over privacy over who can see what, who can interact in what ways, what kind of roles different people have. And we built it inspired a lot by the way internet applications are built, where the internet is a public permissionless network, but every application has very granular controls over who can do what on that application.

(15:43):

So the idea was we thought about this very similar to the cantons of Switzerland where Switzerland is a federation, but there's a lot of control within each canton over the governance of that specific Canton. And we thought of each application as kind of its own canthon. Now also most of the early development of Canton happened in Switzerland. So it was also homage to our team over there who was building the technology while the company was headquartered in New York. So the network, it is a permissionless public blockchain, and we took a bit of a different route from most of the blockchains out there. So we started quite a long time ago in 2014, but where most of the public blockchains came and did an ICO and launched a public blockchain said, "Here's our blockchain, come and build things." We realized that for financial institutions to feel comfortable, we need to first work with them at the time with private blockchain.

(16:33):

So we took a route of, first of all, starting, even though all of the technology was built to be open and public and permissionless, the banks, the financial institutions, the regulators weren't ready for that back in 2014, 2015. So the route we took was, we're going to build this thing, we're going to prove value, we're going to prove real world value where people are paying to use the technology to build systems. And when we're ready and when, most importantly, when the users are ready, when they feel comfortable to go and open up, that's when it will open up. So Canthon itself actually launched in 2020. That's when it went live with the first financial institutions who started using it for various use cases. And it grew quite a lot over the next few years until the public launch in 2024. So over four years, we've accrued more and more financial institutions who are using it for their critical workloads.

(17:19):

But again, they weren't really ready for this opening up of the network. And I think when you're moving trillions of dollars a month on a network, and those are the numbers that are moving today on Canton, it makes sense for people to be a bit cautious and a bit slow in opening up to decentralized governance, to permissionless participation in a network. Around 2023, 2024, that's where some of our customers started saying, okay, we have enough experience with the technology. We understand enough the security of the technology where they started feeling comfortable. Okay, we can start opening up the network and we can actually go and launch the public network without undermining the security of each application that's running on this network.

Ari Redbord (17:58):

It's really extraordinary. I mean, I don't know, obviously you've been working on something for so long, so it's so hard to have this perspective, but certainly I'd say in the last year to 18 months, maybe it's that Canton has really grown with the space. We're now seeing that demand and that interest that I think you were anticipating going back five years. Talk me through this moment and maybe why we're seeing the level of activity that we're right now seeing in terms of engagement with the Canton network and the role that you play.

Shaul Kfir (18:28):

Yeah, I think we're seeing really kind of an inflection moment and a maturity of the space in that there was always this dichotomy in people's heads between public blockchains and private blockchains. And I think within myself and my co-founder, we grew up in the public blockchain space in the public permissionless space. And it was kind of weird moving to this area where for a few years we're building something very much in kind of private blockchain land, knowing that we still see ourselves as part of the bigger public blockchain, more important than public, the permissionless blockchain space. And I always felt that this was a false dichotomy, that these things will converge. We'll see actually the public permissionless space grow with private applications or with applications that have more control. So for years, the financial institutions only felt comfortable working on these private blockchains. But as I think new people came into positions of importance in financial institutions who grew up in this space, who grew up more comfortable with the technology, I know over the years, a decade has passed and people started feeling more comfortable with the notion of public blockchain, that kind of drove to this place where we felt comfortable opening up the network.

(19:39):

And I think now we're starting to see this inflection point where people understand that you can actually have a public blockchain with a lot of control over the applications to the level that an institution needs. So now we're at this point where you're getting the best of both worlds. You're getting the distribution, the openness, the permissionless aspect of a public chain, or you're getting that level of security and control that people always have expected in terms of what they felt they needed to be responsible towards their stakeholders, towards their customers, to with the regulators, towards their internal data systems. And that's a big inflection point. And that's why we're seeing such massive growth of Canton and so many assets flowing to the network because at this point in time, people are feeling they actually can get that best of both worlds and not have to be siloed into either a fully transparent and public informational blockchain or a completely private and silent blockchain.

Ari Redbord (20:26):

That's a great explanation of what we're seeing out there. And I think it's honestly the most exciting thing we're seeing in the space right now. It's fun. Even the conversations that a couple years ago we were having about these walled gardens, these permission blockchains that banks want to interact with, we're now seeing the complete opposite. Hey, what kinds of private transactions can we do on public blockchains? Fun examples, I mentioned DTCC, but what are the ones that are sort of the most exciting to you right now as you're seeing folks build?

Shaul Kfir (20:53):

Yeah, I'd say there isn't one most exciting. The most exciting things that I'm seeing are where we're actually seeing the beginning of what I'd consider institutional DeFi. So where we're seeing that institutions are starting to do things that they couldn't do before just because of the technology. And what I mean is, I think the first era, the first few years of using blockchains, we really saw a lift and shift. So we'd see people take an asset and tokenize it and put it on a blockchain technology, but you ask yourself, why can't they do this before? Why couldn't they do this with a SaaS application with their existing systems? And the answer was they actually could. So I'd say there were quite a few years of this kind of only dipping the toe into the technology and kind of seeing how we rails, but still doing the same thing.

(21:37):

And I kind of think of that by analogy similar to the beginning of the internet era where the business model was to put ads just like you do on a billboard. It took time till people realize that there are new business models. So now we're starting to see these first areas where financial institutions are starting to do the things that have happened until now only in the DeFi world. So collateralized lending with traditional assets and things like flash loans and those things. And we're still only in the very, very beginning, but every time I see one of those things, I'm very, very excited about those. So things like doing weekend repo between two assets, which when you come from a crypto space, it seems so simple. But for someone in TradFi is so radical, but we're seeing the beginning of moving these ideas from the crypto world into the Tratify world, but just the impact is enormous when you think about it from just the sheer amount of assets and reach that the Tratfi world is bringing into this way of doing things.

Ari Redbord (22:35):

One thing that I found so interesting when we spoke prior to this conversation, I was definitely struck by the fact that technologists, for better or worse, are having to become policy experts, certainly in this moment where the technology and the policy to support it are being built really at the same time. One also false dichotomy that I've always seen in this space is this issue between security and privacy. You're obviously building the solution to that. I've always argued for years that there are technology solutions here. I think we're just starting to actually see them emerge in a meaningful way. But when you have these conversations with policymakers, super exciting to see you guys hire my former colleague at the US Treasury Department, Julie Laskar, but as you're having those types of conversations with policymakers, talk me through that policy versus security thing that seems to come up still all the time.

Shaul Kfir (23:23):

Yeah, I think security is a very broad topic and is a very nuanced topic. And actually I'll start and say I've been very pleasantly surprised from all of our engagements with regulators. And I'll say I'm not the one at Digital Azet or Kenton that does most of the regulatory engagement, but I am helping inform behind the scenes. And I'm very pleasantly surprised when you come from the crypto space early on, everyone thought about the regulators as these dinosaurs who don't want to make any kind of progress. I say that's completely not the case. For the most part, everyone we've interacted with are people trying to do good and trying to really understand the technology. But there is a very nuanced interplay between privacy and different aspects of security, the availability of critical system, the integrity of the data. And that's an area where I think we're not necessarily always yet having discussions that are informed enough.

(24:14):

There is a lot of hype in this space. I'll take my alma matter of zero knowledge proofs. I think there's so much misinformation about what zero knowledge proofs are, how they're being used, what are the kind of risks, either local or systemic risks that are being introduced in the name of introducing privacy. So there's still a lot of these areas that I think are under explored, and we really need to engage with people who have the engineering background, but also the ability to explain things at a higher level to regulators and policymakers to understand what we're going into and understand how we're doing these trade-offs. And I think it's very important for policy and regulation to talk about, I'll call it the desired properties of system, but not the implementation, not take sides on how something is implemented, but be very clear about what are the guardrails and what are the feature sets or the security gates that something needs to pass in order to be used in financial use cases.

Ari Redbord (25:07):

It's interesting. I go in all the time and talk to policymakers on a bunch of these issues, particularly DeFi right now around market structure. There's all kinds of questions around the use of mixers and privacy enhancing tokens. You mentioned that we need to make sure that regulators understand the technology. How would you approach those conversations?

Shaul Kfir (25:26):

I think the first thing that we would need to understand is what's wrong with the existing regulations? Why can't the existing regulations apply to this new technology space? And I'll be very honest, I think we as an industry have really shut ourselves in the foot. I actually think that with all of the existing regulation, we could have been just fine. And I am a bit talking in my book here because I think Canton was designed to fit within all of the existing regulation. I don't know that that would completely work with all other public blockchains, but I do think that's a starting point where as an industry kind of came and said, "Hey, come and regulate us. Come and tell us what to do. " At the same time saying, "We're going to disrupt everything."

Ari Redbord (26:05):

Right,

Shaul Kfir (26:06):

The rib and replace.

Ari Redbord (26:07):

Exactly.

Shaul Kfir (26:08):

We were kind of saying, again, these folks are dinosaurs. They don't know what they're doing. We're going to rip and replace. We're going to completely rewire the financial system. Oh, and by the way, come and regulate us. I can imagine that that is very scary for a regulator now trying to understand what's the right thing to do. So I'd start with that and ask what's missing right now and only look at where are the areas where potentially we are missing regulation. Now, I do think for most financial applications, we need to think about privacy. We need to say, what are the rights and what are the obligations of financial institutions when it comes to privacy? But I also think we need to look at those in other things. And I'll give one example that I think a lot of the ways today that people are saying we're going to retrofit privacy on existing blockchains using zero knowledge proofs introduces a huge amount of technology risk.

(26:56):

It's a systemic technology risk. And that's the area where I think we need technologists from the security space come and say, "But this is how we're going to assess risk for these platforms if these platforms are supposed to be in any way systemically critical." And that's an area where I think we're not mature enough. So that's an area I would love to have people in the regulatory space try to understand within the different technologies, what are the different trade-offs that are being proposed today between the integrity of ledgers, the integrity of the financial system, the kind of risk of supply chain risk of just what kind of things can go wrong, what kind of bugs exist.

(27:34):

And that's an area that I would just love to see much more discussion going in and understanding, not have the regulators go and say, "This is a technology. You can use this technology you can't use," but say in any solution, this is the level of control that financial institutions need to have over their applications, whether it's controls about the privacy or if it's controls about how do they recover from different kinds of attacks.

Ari Redbord (27:56):

I couldn't agree more. I think you make so many key points, particularly around regulators and the sort of knowledge/willingness to learn. All the conversations we have are very much that way. I think sadly, there's just a cadre of those globally still today that just have that deep knowledge and expertise. And that's just because I think of the sort of nascent space. Part of it, we published a white paper recently at TRM on privacy, on this issue around privacy, security, particularly compliance and illicit finance. You were nice enough to contribute and sort of take a look at that for us. I think those are the types of things we're at least trying to do. I know you are as well to inform policymakers. Other things that we could be doing?

Shaul Kfir (28:35):

Yeah. First of all, I want to give a shout out. I do think it's a great white paper is a great first step in terms of acknowledging an issue that we need to resolve here. And for those who aren't familiar, that white paper talks about the tension between privacy and compliance. In the public blockchain space, we've grown accustomed that compliance happens by seeing everything completely transparently, and it does make the life of law enforcement harder when everything is private. But that said, we all, I believe most of your listeners believe that we do have a right to privacy and weighing those two things, there is a tension and that's something we need to acknowledge. And we need to think about how do we live with that tension? How do we give people the privacy they need while also giving law enforcement whatever tools they need within whatever they're allowed to use to be able to do their investigations and to stop the bad guys. So first of all, shadow, it's the first paper that I've seen of this kind that talks about this tension very explicitly.

(29:25):

I would like to see more concrete discussion go on between the practitioners, the companies, the companies providing technology like digital asset, the issuers of assets, the users of assets, regulators, and law enforcement to better understand how, assuming that this goes on and that this is going to be a technology that stays with us, this is how the financial world is going to work in the future, how do we get ahead of it and make sure that everyone's needs are met? So I would love to see more of that. And I think TRM is doing a great job in taking those first steps and I'd love to see you continuing and I would love to continue collaborating on that.

Ari Redbord (29:58):

Awesome. And really excited Do that. I mean, it's crazy. Look, we are, I think, viewed like other companies out there. We're doing surveillance. We're tracking and tracing the flow of funds. I talk all the time about our ability to do that on public blockchains. What's so cool for me is I joined TRM about six years ago. We were eight people. And what people don't realize is these are the conversations we were having. Esteban and Castano, I remember him talking me through this idea that we have more visibility today than we'll ever have. And that's a good thing. And we really need to build the tools to meet that moment where security and privacy are not mutually exclusive, but really something that are essential to the growth of this space. And it's still cool to be having this conversation in a much more tangible way with you today.

(30:44):

I'm going to end on a fun note, and that is when you're not building financial infrastructure or when you're not dealing with cutting edge technology, what do you do? What do you do to relax? What do you do to have a good time?

Shaul Kfir (30:57):

Yeah, I guess you're asking after the 26 hours a day of

Ari Redbord (31:02):

Work-That's exactly what ... What do you do in hours? Yeah, 27 to 28. And the minus

Shaul Kfir (31:05):

Two hours that are left. Yeah. So first of all, I have three beautiful kids in that. I love spending as much time as I can with them. So that's just, I'd say, since having kids, that is the main hobby is just being with them and spending time with them. But when I'm not doing that, I'd say whenever the weather's nice, I love sailing. So I spent quite a few years in the Navy in Israel and got that bug of sailing. So try to spend as much time on the water whenever work and weather permits.

Ari Redbord (31:34):

Tell me about that a little bit.

Shaul Kfir (31:36):

So I do it at a hobbyist level, but especially again, given the time constraints, but very typically you'd have these competitions that are a few hours every time. And whether when I lived in New York, it was racing on the Hudson. And now I haven't found a racing crew here in Israel, but would need to do that. But you go out for a few hours. It's intensive, so you can't think about anything else. So everything that's going on in your life with work, with kids, when you're racing, you're racing. And that's the only thing you're thinking about. And I'd always try at least once a year, twice a year to go on a multi-day race where it's really kind of day and night and you're exhausted and you're tired and you're wet. But again, you can't really think about anything other than surviving the next five minutes and getting ahead of the other boat.

Ari Redbord (32:24):

That is so cool. Coolest story from a multi-day race.

Shaul Kfir (32:28):

Oh, man. There've been a few, but I think it's always the hardest parts are the most fun. So I guess there's cool in just seeing all of a sudden last time I went, we saw whale breach all of a sudden break the water next to us. So I happened to actually capture that on camera. I was having those Ray-Ban meta-

Ari Redbord (32:49):

Oh my gosh,

Shaul Kfir (32:50):

That's

Ari Redbord (32:50):

So cool. Okay.

Shaul Kfir (32:52):

So I capture that and you always have dolphins coming next to you. And so there's that aspect, but the best stories and the most fun are just the hardest parts of crazy storm coming in and then just seeing the lightning and still trying to navigate throughout that.

Ari Redbord (33:06):

And what a metaphor for building in crypto. Yeah,

Shaul Kfir (33:08):

I

Ari Redbord (33:08):

Guess. The hardest moments are the most memorable, valuable, right? Yeah. Yeah, exactly. So for coming on. This was an extraordinary conversation. So grateful to have you on the show. Thank you for having me. You have mentioned a few times that you're in Israel and we're just thoughts and prayers are with you and your family and stay safe.

Shaul Kfir (33:29):

Thank you very much. Thank you. And it's great being here and let's continue building on together.

Ari Redbord (33:33):

Absolutely. Thanks again for joining TRM Talks. This was such a cool conversation. I've been thinking a lot lately about that intersection of privacy and security. And by lately, I mean, for a really long time, we've had these discussions over the years around nine eleven, whether it's on city streets or in airports. And really today the conversation is happening in a meaningful way on blockchains and Shaul and the Canton Network are really a key piece of that. I've always said to regulators and policymakers, there is a technology solution to this. And Shaul and the digital asset team have in part built that. And it's really extraordinary to see in this moment of institutional adoption, the technology meeting the moment that he talked about this moment in time and it really, really is extraordinary. So yeah, I mentioned the white paper on privacy that the TRM team worked with Canton and others on, and we're going to be talking a lot more about privacy and security and the technology around that.

(34:37):

So, so, so cool. And I think what my biggest takeaway is you have a technologist here who's working on cryptography, and then he discovers Bitcoin. He reads the white paper and ultimately there is, he doesn't describe it as this aha moment, but I'll do the storytelling where we have this incredible new financial technology and we could marry it with cryptography and the technology that he's working on around starks and snarks and zero knowledge proofs. And boom, you really have this extraordinary moment. On the next TRM Talks, I sit down with head of product for digital assets at Solana Foundation, Catherine Gu. If you love the show, leave a review wherever you're listening to it and follow us on LinkedIn to get the latest news on crypto regulation, compliance and investigations.

TRM Labs (35:27):

TRM Talks is brought to you by TRM Labs, the leading provider of blockchain intelligence and anti-money laundering software. This episode was produced in partnership with Voltage Productions. The music for this show was provided by iKOLIKS.

Ari Redbord (35:44):

Now, let's get back to building.

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