Banking giant Wells Fargo is investing in the London-based blockchain analysis startup Elliptic with a $5 million investment.
The investment into Elliptic from Wells Fargo’s venture unit, Wells Fargo Strategic Capital, is an extension of the startup’s $23 million Series B funding round announced in September 2019. The additional investment brings the company’s total money raised to over $40 million.
The Startup has become known for its analysis tools, which it sells to some of the world’s largest cryptocurrency platforms to help them find and block illicit digital currency transactions.
The analysis tool, Elliptic Discovery, was able to uncover a terrorist group using bitcoin to finance its operations by tracking suspicious transactions on the cryptocurrency’s digital ledger known as the blockchain. It then flagged this to its clients so they could cut off the funds.
Elliptic Discovery, provides a bill of health for over 200 crypto exchanges worldwide, covering everything from how they conduct know-your-customer (KYC) checks to whether they’re regulated in the first place. The aim of Discovery is to give banks a sense of their exposure to crypto-assets through their customers’ transactions and identify whether there are any money laundering risks.
Most big banks have avoided crypto businesses due to the perceived risks. However, crypto firms like Elliptic and similarly bank-backed Chainalysis are thought to have a bright future, with law enforcement agencies doubling down on crypto and industry regulations becoming clearer.
“More and more financial institutions realise even if they don’t touch crypto themselves, they are adjacent to crypto. They are exposed to crypto risk and have a responsibility to understand what the risk is and how to manage it.”
– Elliptic co-founder and CEO James Smith.