From Privacy to Policy: Building the Compliance Layer for DeFi with Nikhil Raghuveera

Ari Redbord (00:02):

I am Ari Redbord and this is TRM Talks. I'm Global Head of policy at TRM Labs. At TRM, 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.

(00:51):

Today I am joined by Predicate, CEO Nikhil Raghuveera, but first Inside the Lab where I share data-driven insights from our blockchain intelligence team. In the first half of 2025, crypto hacks and exploits hit a staggering new high. According to TRM's latest report, over $2.1 billion was stolen across nearly 75 incidents more than all of 2024 combined and even surpassing the previous half year record set back in 2022. But this wasn't just about more hacks, it was about bigger, more sophisticated attacks. What stands out most is the dominance of infrastructure attacks. These are not protocol level vulnerabilities, but compromises of the systems around the blockchain. Things like seed phrase theft, private key leaks, and front end takeovers. These accounted for over 80% of all stolen funds and were on average 10 times larger than other categories of incidents. Social engineering and insider threats played a major role showing just how much risk still lives on Chain One event defined the first half of the year, the February hack of the B exchange, which resulted in a $1.5 billion loss, about 70% of total funds stolen in the first half of 2025.

(02:17):

TRM analysts attribute the hack to North Korea, part of a broader trend of state-sponsored crypto theft. In fact, TRM assesses that North Korea was responsible for at least $1.6 billion in losses in just the first six months of 2025. And it's not just North Korea. In June, Iran's largest exchange, novitex was hacked by a group reportedly linked to Israel. That group siphoned off over $90 million and sent the funds to addresses that no one could access, likely making a political statement more than a financial play. The takeaway we're not just seeing criminal innovation, we're watching geopolitical escalation. In this moment, the role of blockchain intelligence has never been more critical. At TRM, we believe protecting the ecosystem starts with understanding these threats, following the money, and working across borders to disrupt illicit networks. And now, Nikhil Raghuveera.

(03:23):

Nikhil, thank you so much for being with us today.

Nikhil Raghuveera (03:26):

Yeah, thanks for having me. Excited to be here.

Ari Redbord (03:27):

Really looking forward to the conversation. We at TRM and Predicate announced a really cool partnership several months ago now, and I am excited to dig into that in a bit. But really over the last few years, you have been on this Predicate journey, building this really next generation compliance solution for DeFi and really across the ecosystem. Could you talk a little bit about your journey?

Nikhil Raghuveera (03:51):

Yeah, for sure. My journey before Predicate, and I think a lot of that ends up informing why build Predicate really in the first place. It's not the most common type of company to build in particularly this industry, but a lot of my background informs that. So I started my career over a decade ago in economic consulting in the litigation space on securities and antitrust. So did that in Boston and San Francisco. Some of the cases I worked on were related to large antitrust violations by organizations, things like LIBOR, manipulation by financial institutions, mergers, those kinds of things. And basically from there, that experience was a lot around how do capital markets work today, right? What are the challenges with how we've set up a financial system today? So I had a lot of experience there. And then after that went and actually went to business school and policy school policy.

(04:40):

I heavily focused on tech policy and during that time is when I started getting interested in digital assets. And that was because again, it was that prior experience of how do you build a better financial system. The cool thing on legal when you work in the legal space is everything you work on is you look back like five years for any major corporate litigation. And so you're always tied to the past, right? There's no opportunity to say, wait, there's a better way to do this or a different way to do this. There's no opportunity to do that. The only thing you can look at and say, wait, there was something that was wrong there, people were harmed, there were damages, and you're kind of stuck within that box. So then, yeah, it was then going into grad school, focusing on tech policy saying, wait, there's opportunities to build better systems.

(05:20):

And so that was really when I got interested in digital assets and crypto, but was at BCG for a little bit afterwards, was focusing on public sector, private equity and pricing strategy. So Boston Consulting Group and management consulting where again, I was looking a lot at egacy tech. And again, it's that same challenge of we are stuck and weighed down an anchor to our prior systems and how they fit. In this particular case, it was traditional SaaS models as well as data harvesting ad revenue. The whole business model is predicated on collecting data on users and people. And so for me, that was where it was really pushed me to enter crypto. And so the first place I really was at was Cell, which is a layer two blockchain, formerly a layer one blockchain heavily focusing on emerging markets and payments. That to me was really interesting because that was why I was like, wait, there's such an opportunity here to think about cross-border payments, ownership of financial tools in a way that just hasn't been done before.

(06:16):

So I was at sell, and I think all of that kind of leads to Predicate, which was while at Sell was thinking a lot about how are financial systems going to scale and if we truly believe that blockchains are going to be the next global financial settlement system, I think that's why most of us are here saying that, wait, we're building a new stack entirely. You're going to need additional tooling, particularly around how to navigate regulated and unregulated markets. And that essentially led us to Predicate. But a lot of my experience is kind of coming from this private sector spent time in policy world at the Atlantic Council where I still, I'm still at the Atlantic Council, did some brief stints in the nonprofit world where I worked at the Equal Justice Initiative in Alabama. But all of this was in the service of leading to we have to build a better financial system.

Ari Redbord (07:01):

What's so cool about that journey is it feels sort of disparate I'm sure to you at the time, especially anything else, right? You're just doing these things that you're passionate about or excited about, but it really does tell this cool story. Even I didn't realize the piece on the Equal Justice Initiative, which is so interesting, I think of what a lot of the work you're doing now is access to banking services, access to capital. But there really is this really cool consistency around it in terms of obviously trying to understand the issues from a legal perspective, but marrying that legal knowledge and interest with technical expertise, which is really, really cool.

Nikhil Raghuveera (07:36):

Yeah, I think that's right. And what's fascinating about crypto and digital assets is that intersectionality, right? A lot of topics, a lot of spaces, you don't have that type of opportunity of intersectionality. I think in emerging tech you do, and that was one of the reasons I really got interested in the space is when you think about crypto, you think about this financial components. If you look at legacy financial systems, there's a FinTech play, there's an operations play, there is like a data privacy aspect, there is a data ownership component and identity systems, and then there's access as well. And we would talk about even from the equal justice initiative standpoint, we would talk about access to financial systems regularly because that was a problem. So someone who's formerly incarcerated is then reentering back in the workforce and they're heavily limited on the financial tools that they can access. So again, even from that standpoint, there was always this question. So you see all these different pieces start fitting together and it is hitting a common aspect of what type of systems can we as people, as communities actually access?

Ari Redbord (08:31):

That's awesome.

Nikhil Raghuveera (08:32):

What is Predicate? So Predicate, our view as many others is that blockchains become a global financial settlement system. And so that means that capital moves, capital accumulation, capital flow moves from traditional financial rails over to blockchain based systems. So we start with that worldview. From there, it's then the question of, okay, great. So if that's the case, that means that we are at the end of the day going to be building financial products on chain that are navigating across regulated and unregulated markets. So think of different organizations building financial products, some of them more decentralized, some of them more centralized. And the reason why financial products on chain, it's 24/7 access, global liquidity, the composability, you're building on a new rails, it's all connecting together, all of those things. But then you're building these financial products that are operating in the United States, are operating in Singapore, are operating in Europe, have users and organizations in all of these different markets.

(09:24):

It's not that you're just building an abstract. You have real people, real businesses who are using all these different things and you as an organization are managing various components of this application that people use. And I think there's a nuance here where there's some things that are fully permissionless infrastructure, but then there's other things that are just financial products that are on chain. And so with that view, then it's saying, okay, great, you're going to have financial products on chain. They're navigating across regulated on unregulated markets. We realize that you need the infrastructure and the tooling to actually be able to build and enforce policies to meet the requirements, your business, legal and regulatory requirements for those financial products. And it can't be something that's an afterthought. So far, so much in the industry, when I was at Celo, when I, I've been at the Atlantic Council, there's always questions on, wait, how do you actually enforce these types of business legal and regulatory requirements, especially as organizations scale.

(10:15):

When you're smaller, you're not thinking about it, but when you're getting bigger, you're saying, wait, we are really hitting, we have real volume. We have real users, we have real organizations using us. And so you need that tooling to be in place. It can't be an afterthought. It has to be something that's high performance. It has to be something that is resilient. It is something that essentially is determining whether a transaction goes through a financial system or not. That's really what it comes down to. And so that was what we had to do with Predicate. And so when we talk about it, it's all these different types of questions around it. How do you deal with anti-money laundering CFT requirements? How do you deal with fraud detection, fraud prevention? How do you navigate geolocation requirements, civil resistance, identity verifications, all these different pieces. And instead of it being piecemeal of just one type of thing, it's that these are all holistic. These types of requirements are a continuum depending on the organization. And the crucial thing is that KYC is oftentimes not the only answer. I think in the past, this industry has just said, oh, slap KYC, and we're good to go, right? But that's wrong. And because most financial activity does not require KYC, in fact. And so we have to able to envision a world in which not everything has to be kyc, but rather there's a continuum of holistic set of different requirements and different organizations need,

Ari Redbord (11:24):

I've heard you refer to this as policy infrastructure. What does that mean?

Nikhil Raghuveera (11:27):

So the way we think of policy is the rule of stipulations requirements for what can go into a financial product. And so the policy can be determined by a general counsel, a C-suite of an organization, product team, whoever that is, but they're setting specific rules and requirements for what transactions can go through an on chain application for Predicate. We define that as policies. And so in that case, we are policy infrastructure because we allow the application to be able to have and enforce those policies.

Ari Redbord (11:57):

Fantastic. Look, for years I went to US Treasury round tables and conversations with frankly, Department of Justice and others on what compliance could look like, potentially specifically financial crime compliance in a truly decentralized world, right? Today, even up to the legislation that's pending in Congress, it's all about how to regulate the centralized cryptocurrency space, stablecoin issuers, centralized exchanges. Is it a commodity? Does it security? That kind of deal. But eventually we're going to move into a meaningful conversation around what compliance looks like in DeFi. And to your point, it's not just AML compliance. Is that part of what you're trying to solve with Predicate?

Nikhil Raghuveera (12:38):

Yeah, I mentioned the continuum of requirements. I think it's also the continuum of types of organizations and the types of applications you'll have. To your point, stable point issuers are more centralized asset issuers. There's this web 2.5 component of, as you see some of the more FinTech organizations launch things on chain, those are still centralized organizations. But I think then you also have more decentralized organizations that also need different types of requirements because of the ecosystems that they create. So I think the best example I can think of is there's a major exploit, let's say North Korea, DPRK engages in a major exploit, steals a large amount of funds, and that could be from a defi project on a chain.

Ari Redbord (13:16):

That has happened many times in the last few years for sure.

Nikhil Raghuveera (13:18):

Exactly. And so I think there's actually opportunities for the ecosystem to say, wait a second. Certain defi protocols could say, we don't actually want these funds. We want to vote as a DAO to not accept these funds. And there is always these questions around what is censorship and is it censorship or is it censorship resistant? But we're seeing a world of essentially what I think of as values expression, and it's not something that is purely censorship resistant. I as a normal person, when I go out to the street and I go to a store and I buy, when I buy a pair of shoes, I'm making sure I'm not buying a pair of stolen shoes. If I want a pair of stolen shoes as a discount, I know where I can go for that. You can go to a street vendor and do that, but I'm intentionally going to a store where I know that they procured it appropriately, all of those things.

(13:59):

And in the same way, I think you have ecosystems that are going to care about their own requirements as well, because that is the type of ecosystem they want to create. Now, how do you actually ensure that some of those things don't happen? Or if it does happen, how do you minimize the impact? That's where it starts mattering from a decentralized space. But for us, there is that full continuum, and we do have at least one of our partners that passed a governance proposal saying we are going to pass a governance proposal to enforce certain requirements. But yeah, we've talked a lot about it in dc I'm sure you've been, I think, front and center on it of there's all these different things and how do you have the nuanced view across? Are you a centralized organization? Are you more decentralized organization? What are the different things you need or might need as well as for the users who are participating in those systems?

(14:41):

I think this is a part that crypto sometimes forgets is, yeah, we can build permissionless infrastructure, which is awesome, but then the people who are in those markets, the people who are in various markets still have to consider their own requirements even if they are using permissionless infrastructure. And so those are the other things that we have to think about is, so if I'm a user or if I'm an organization, I'm saying, cool, I'm facilitating liquidity, I'm facilitating a swap. I probably can't facilitate that large exploit of tens of millions of dollars stolen by North Korea. I probably don't want to be in that position because I am someone who's in the United States and I don't want to facilitate that.

Ari Redbord (15:14):

It's interesting you talk about sort of being in front of the center of these conversations. The question that I always would get, I'd say it was more like as we were really digging into this issue a few years ago, treasury put out a defi risk assessment. There was a lot of conversation FATF had written on DeFi. I'd say that conversation has receded a little bit with the focus more on getting legislation on centralized crypto through, but it'll inevitably be back. And my answer was always like, look, I think the technology actually enables better compliance in the decentralized space today, whether that's blockchain intelligence tools that are able to track and trace funds on open ledgers. But the reality is that we've always done anti-money laundering sanctions on the front end of major DeFi protocols today, and regulators, policymakers will roll their eyes, Mr. Redbord again on crypto tracing, and I would always talk about the potential for zero knowledge proofs and other types of applications that can actually allow us to do compliance better. That is all a long-winded way of saying that. I think for the first time really, we've been trying to address this issue in part together having announced a partnership between TRM and Predicate.

Nikhil Raghuveera (16:18):

Yeah, on the first question, I think, no, I think that's spot on, right, is that we are building a new technology stack and not Predicate, but I think the industry as a whole, and it's something that's highly programmable and that's a great part, these things around AML risk management, all of those aspects are actually much better suited for blockchain-based systems and traditional financial systems. In fact, do you have the traceability organizations like TRM, you guys are doing that, right? Showing the traceability and being able to say, Hey, look, we can actually have deep investigations on this, the programmability of before a transaction gets executed or once a transaction has been executed, the post aspects of that as well. But again, all of that baked in an automated fashion, even for something like stablecoins, I think right now there's still an opportunity to say, wait, we can automate a lot more of this too than how it's currently done because we don't have to operate a traditional bank.

(17:05):

And how they take part in their full extent of AML processes and compliance processes. And so there's such a unique opportunity to say, wait, there's a better way to do this. And then on the zero knowledge proof, that's another one, right? I think of the fact of identity of you have to KYC on something that you do, and it's now just a honeypot. And for me, normally I'm like, why do I need to share my phone number? If you actually just need to know this specific part, or you need to confirm that I'm based in Boston, why do you need my phone number on top of that, which is not even a Boston based number, it's a Florida based number because that's where I grew up, so there's really no connectivity there, and then there's a data leak and now I'm getting spam calls, all those kinds of things.

(17:39):

So zero knowledge is a great way to also say, wait, there's a holistic set of things we can do, and I think this is where the industry is going. And then that leads into our work. So TRM, of course, you guys have the data investigations tools, the blockchain analytics, all of that firepower. The challenge for any developer is how do I effectively use all of this data, all this tooling from TRM within my smart contract stack? And generally speaking, a developer would've to say, wait, I'm going to go and build my own infrastructure for this, which is usually not part of their core work. Think of most organizations, they're like, wait, how do we get more users? How do we scale our organization? They have all these other things they're trying to deal with. But then if you're saying, oh, you have to also build the tooling and maintain it and ensure high throughput, low latency, all of those pieces, because if it goes wrong, then now your entire application is shut down.

(18:24):

You're not receiving any transactions anymore. How do you actually do that? And so for us it was we can build that common infrastructure that anyone can use that can leverage TRMs investigations tooling. So that was really what we built, is how do you build that high performance infrastructure for on chain financial applications? And it's been awesome. We've had one of our applications I think has been receiving tens of thousands of transaction volume per day and everything goes through, it doesn't get halted, right? And that's awesome. And even if there's any types of slowdowns on our end or tms, and there's ways that we can actually navigate that from a resilient standpoint, because really what we're saying here is policies critical infrastructure. If policy stops working, your transactions get halted. And so how do we actually enable TRM's mechanisms, TRM's tooling to be deeply used within the technology stack rather than historically it's just been on the front end and you put it on a frontend interface. The immediate thing for anyone to use is, I just want to use that front end interface. Lemme just use another one. Or interact direct with the contracts. We were saying, no, no, no, that doesn't make sense. How do you actually deal within the technology stack?

Ari Redbord (19:25):

Yeah, no, it's been super fun over the last several months really since February to have an answer in large part to the questions, Hey, we have this partnership right now that is trying to address exactly your concern. How do we deal with bad actors who are essentially going direct to the protocol.

Nikhil Raghuveera (19:39):

And live too? I think industry, we talk a lot about, we go to dc, we talk about the opportunities and potential of zero knowledge proofs, but you don't have necessarily large use cases at scale. This one we do, which is pretty cool. It's like you want to go see it code's right here, go take a look. Oh, you can also go and try out this application that's using it. You won't even realize it's happening unless you literally pull up the code and say, oh wait, I need to look and see how this call is being made.

Ari Redbord (20:01):

Totally agree. I think that one of the big eye rolls over the years have been like, well, this is a future state. And sometimes I'd have to say more or less, but I think today I actually have something to point to, which is awesome. In terms of Predicate partnership, one or the other or both, where are you seeing the most sort of need or interest in this type of tool?

Nikhil Raghuveera (20:18):

For us, it's been heavily around RWAs. So real world assets, privacy, stablecoins are probably our three core buckets. And then the next one that's kind of a catchall I would say is any organizations doing a larger use case and saying, Hey, wait, we're navigate across US markets and Singapore and European markets. But that might be more like defi related such as swap types of things. But I would say generally it's in the stablecoin RWA and privacy space.

Ari Redbord (20:45):

Cool. Just break that down a little bit. How are you seeing it play out? Because I'd say that those are arguably three of the sort of even broader hot topics or really interesting areas in crypto today where folks are building.

Nikhil Raghuveera (20:56):

So on the privacy space, Aleo privacy blockchain, so based out of the US, they needed to set some different requirements for who can bridge into the Aleo blockchain from Ethereum and any other chain. And they passed a governance proposal for that. They said, look, we are a privacy system. We can't become a hub for money laundering. And so they passed a requirement of different types of rate limits and different specific sanction types of checks that they wanted done. All of that is powered through Predicate. So if you try to bridge to Aleo credit is doing the check on the backend, no KYC required another one that is Plume Nest. So Plume is RWA oriented L2, and they have this vault system called Nest, and it's as a user, you can go and deposit and then it generates yield and the yield is coming from different types of tokenized treasuries and different types of private credit, public credit assets.

(21:44):

And so the idea is I should be able to seamlessly go and deposit it into this financial product that is then giving me yield anywhere from like five to 15% depending on the type of risk I want to take on with my stablecoin deposit. So for that, basically what happens is TRM is being used there where as a user's depositing into the vault through Predicate, it's getting checked by TRM. And so anyone who's trying to deposit in has to get approved through A TRM check per the parameter set by the Nest product team. And they had to go and define those specific parameters and you work with them for that. But all that happens, and if they don't, then the transaction just gets rejected. They won't be able to deposit into it. So if TRM flags it as a high slash severe risk according to the settings that are set by the Nest team, the transaction will go through another one is on the more stablecoin space.

(22:31):

And so take a yield bearing asset like Paxos, lift dollar USDL for them, they're saying, look, it's not issued in the United States because it was the US Securities and Exchange Commission require that it be a money market fund, but they haven't issued in the United States, they've issued it out of a ADGM Abu Dhabi for them. They can't actually provide that asset to US customers as well as other sanctioned regions and a few other markets. And so what they've done with us is they're actually using infrastructure that we built with Unis Swap that allows you to set programmatic rules for who can swap or LP into a Uniswap pool. Paxos is essentially building their own liquidity pool on Uniswap that they service, and I think they also work with some market makers and then they build an entire financial product around that. But in this case, Paxos is enabling geolocation as well as AM CFTC requirements for who can swap. So Paxos is setting those types of programmatic rules within their Uniswap infrastructure.

Ari Redbord (23:23):

That's really cool. Great answer. I love the examples there. I feel like this is such an interesting piece of a broader conversation that's happening around the Bank Secrecy Act and data privacy. To that end on sort of the BSA conversation that's happening out there, I think for years you have been really interested in the intersection of privacy technology rights Web3. How do you see all this playing out? Are we building towards the answer for meaningful BSA reform based on sort of technological capabilities?

Nikhil Raghuveera (23:54):

I think we are. I don't think it's, but it's not a quick exercise that you solve, but I think there is an opportunity for us to reimagine that. And I think that is, so much of it is that KYC systems in and of itself is not often the answer. It doesn't work. You create honeypots of data and I think it's only going to become a bigger and bigger problem that you're having to think about your own data ownership and the access to it and what are we giving up in any of these cases? And I think world of AI as well, all that data out there of our personal information is not the ideal state. And I think there's just a better way to do this. And I think it's informing that, and I think it's not just speaking in hypotheticals, but saying, Hey, look, here's actually how this done.

(24:33):

Here it is that it's live. And I think there still is that there is that middle ground of I don't have the view that everything has to be fully private in a way that there is no law enforcement mechanisms whatsoever. I don't think that's actually the end state that most people want. And I am someone who actually came into crypto very much with an interest around privacy as well. It was my big interest for privacy and payments. You still have to be able to track that middle ground because we as society oftentimes are just not comfortable with crime. We don't want to engage with crime, we don't want to facilitate crime. You can say you're fine with it, but the moment that it affects you or someone, one of your loved ones, you will care about it. And I think that's really where the world goes in the longer arc.

(25:10):

And so in that case, I think there is that opportunity with BSA of saying, wait, there are better ways to do this. But I've also seen for Predicate, we start entering into a world of market integrity. It's not just there's the law enforcement, the BSA top of mind for DOJ cent and Treasury, all those guys. There's that aspect. But then I think there's also the market, the market integrity component, which folks at the SEC really care about. And this takes me back to questions around LIBOR manipulation and aspects like that. That's a question of market integrity. So when we're thinking about what transactions can get facilitated on chain by a financial institution or someone who is a centralized asset issuer, who are the market makers of a system, what's a volume of transactions that can go into a system that may not be super liquid yet? Because most tokens are not very liquid. All these come down to market integrity questions. But even for that, those are policies that Predicate can power. And so those are the other things that I think a lot about now is that the aperture that the total addressable market for us gets wider because you're building a new financial system. So there's the law enforcement components, there's investigations, there's compliance, but there's also just how do you have a well-functioning financial system?

Ari Redbord (26:14):

It's really well said, and I think it's interesting. There's this other component where it's not just regulators who care about the issues, but it's the builders in the ecosystem itself. We can't live in a world where North Korea can steal $1.5 billion. We can't live in a world where certain actors can manipulate markets. And when I talk to folks in industry and the builders, they want access to these tools. They just don't want them to be overly cumbersome or a invasion of privacy. And I think that's kind of like, I believe the exact needle that you're threading that we're threading together.

Nikhil Raghuveera (26:44):

And I think then over time, I mean this has been our broader vision of where Predicate goes and even the industries, you start creating networks around this in the same way that you have in financial services. You have FATF, for example, or you have shared requirements by DTCC and other settlement layers. You have shared requirements across financial institutions across different markets, United States and Canada, for example, right? It's easier for me to send money to Canada than it is to send money to India. Why? Because there's a huge compliance overhead that starts happening too when you send money from the United States to India. And that is a challenge across financial systems. So for Predicate, it said, you're actually building these shared networks over time, which also makes it easier for developers to think about. So if I know that I'm building a composable application with another person, and I know that they're not allowing North Korea and exploited funds from North Korea to be able to go in, that means that North Korea funds are not going to come from that place either. Now you're creating these shared networks, which gets really fascinating both across from an ecosystem standpoint as well as you're creating the end-to-end financial systems itself.

Ari Redbord (27:44):

You got to this a little bit earlier, but why does it matter, right? Why does this ecosystem matter to you? And coming from cello and obviously that background, you're always gravitating to that sort of, we can leverage this technology to do real good in the world, but where are the places that you're sort of most passionate or most looked to when you obviously deeply care about the tech and are trying to protect it?

Nikhil Raghuveera (28:02):

The parts that I really care the most about, I would say, are stablecoin payments cross border as well as emerging market and even locally. So I would say that's one. Privacy is another one for me, particularly around the fact that I think we've been web two, the entire business model is based on data collection. Social media companies make a killing off of data collection, and that's the entire system. But I think there's opportunities from a privacy standpoint of we can actually have protocols that operate without needing to monetize on our data to be able to operate. And I think that's really, really fascinating. And then I think the other part is actually more around savings types of products because not everyone has access to saving solutions. And so having that is something that opens up markets for people that just historically to me, that's quite powerful.

Ari Redbord (28:46):

Are there policy conversations happening right now that you're most interested in?

Nikhil Raghuveera (28:49):

Yeah. The one I'm following most closely has been the stablecoin regulation. That's one, so genius and stable. The other one that I follow is anything around anti-money laundering, CFT, like BSA, those aspects. So for example, Tornado Cash ruling, right? So that's what I'm following closely. I think if it goes in certain directions, it actually very detrimental to how we think about blockchain technology. But another case, it's like, okay, great, this makes sense. We're now becoming a little bit more sophisticated about it. And so I would say specific things around law enforcement aspects and stablecoin regulation.

Ari Redbord (29:20):

Terrific. The answer to this question might be absolutely nothing because you're an early stage startup founder, but in your free time when you are not building next generation compliance for DeFi and beyond, what do you do to have fun to unwind a little bit?

Nikhil Raghuveera (29:36):

Yeah, that's a great question of which I definitely don't spend enough time doing in and of itself.

Ari Redbord (29:41):

None of us do.

Nikhil Raghuveera (29:42):

Yeah. For me, working out as well as I play a lot of video games to unwind. I grew up playing video games a little bit, didn't play too much in college, played a little bit after college, and then since starting Predicate, I feel like I've been playing a lot more because it's a good way to unwind.

Ari Redbord (29:56):

We've had some pretty legit gamers on TRM talks. Any favorite games?

Nikhil Raghuveera (30:01):

So for me, gaming, I cannot do multiplayer games like online multiplayer games because relatively competitive, and it's just not a relaxing experience for me. Then I'm just sitting up straight thinking really hard, trying really hard. It's just not the way I need to online. So a lot of my games are story oriented, RPG types of games and things like that. So I have a PS five, so favorite games recently was God of War, great story game with a tight storyline, and it was a great game. So that was one that I was playing recently, which was awesome.

Ari Redbord (30:30):

Really cool. Like you said, pre-college or whatever, did any of the sort of gaming, obviously say what you want about gaming, but you're touching the technology, you're interacting with it, A lot of it has become much, much more sophisticated in terms of a lot of the sort of ecosystem building and network effects and all of that. Any of that inform the work that you do today?

Nikhil Raghuveera (30:48):

I haven't thought about that, but I think I would say it's not so much of from a technology standpoint, I would say the part that I've appreciated from gaming that I think still applies is the storytelling, right? It is the aspect of you creating communities and the storytelling that comes about through games, not too dissimilar from TV shows and movies. And in the same way when we were articulating a new way to live a new financial system. There are really good lessons for that. And I think it holds also for some of the great sci-fi movies as well of, wait, how are we envisioning a world that's different than what it is today? I think gaming can be in that same vein as well.

Ari Redbord (31:26):

Amazing. Nikhil, thank you so much for joining TRM Talks.

Nikhil Raghuveera (31:30):

Yeah, no, thanks so much for having me here. It's been a ton of fun.

Ari Redbord (31:37):

It's funny, the conversation that Nikhil and I had at Tatte came up during the show today, and it really was this kind of extraordinary moment for me. We were sitting there actually at the bar because we couldn't find a table and we're having a coffee, and I was just really struck by IL's thoughtfulness and his just laser focus on solving a problem. And the problem is something that we at TRM have been thinking about for a long time, really. He mentioned tornado cash really since the tornado cash sanctions years ago. The first wave of sanctions and the entire crypto ecosystem trying to figure out how should we think about compliance in a truly decentralized world? How should we think about providing compliance services to defi protocols? How should we be building today? But then it's really how should regulators and policy makers be ensuring that lawful actors have access to privacy, enabling tools like mixers, like privacy coins, but yet stop bad actors from taking advantage of that technology and listening to Nikhil that first time, and then listening to him again today, I continue to be struck by the promise of the technology that we're really building together to solve.

(32:47):

To me, what's the most interesting and arguably difficult question in crypto today, and that is, how should we think about mitigating illicit finance market abuse in a truly decentralized world, not the sort of issues that we're necessarily focused on today when it comes to centralized, stablecoin issuers and centralized exchanges. And I think that finally, we have a good answer to regulators who are asking those tough questions. On the next TRM Talks, I sit down with Joey Garcia of Xapo Bank. 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 (33:33):

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 (33:50):

Now let's get back to building.

‍