Shielded BTC on VFX means wrapping onto their chain - the privacy budget is bridge trust plus validator set, not Bitcoin's security model. Zcash has run shielded pools since 2016 and only a small fraction of ZEC ever sits in them because institutions need travel rule attestations, not opaque address graphs. Post-Tornado Cash, any compliance desk touching mixed UTXOs inherits OFAC exposure - "institutional demand for privacy" usually translates to MPC custody with selective disclosure, not bridged ZK wrappers.

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