Investors may be flocking to blockchain technology startups that are seeking out new ways to use the tool, but one startup just secured investment for making sure that the businesses using blockchain are doing so within the confines of the law.
Reports on Monday (March 21) said Elliptic raised $5 million in Series A funding, signaling investor support for the company’s solution that uses machine learning and other analytics tools to identify whether activity within blockchain transactions include illicit or illegal deals.
Paladin Capital led the investment round, reports said, which also saw participation from Santander InnoVentures, KRW Schindler, Digital Currency Group and Octopus Ventures.
In a statement, Elliptic said it anticipates high demand for its solution within both the private and public sectors. The firm added that it would use the funding to strengthen its position in the industry of fraud detection, blockchain compliance and the like, while helping to promote and improve the transparency of blockchain solutions.
“Our new investors bring deep expertise in law enforcement, international financial services and blockchain technology, and we are excited to work with them on our next phase of growth,” said the company’s cofounder and CEO, Dr. James Smith, in a statement. “We have already been able to expand operations to the U.S. and will continue to extend our portfolio of products.”
Paladin, which targets its investments in cybersecurity, business intelligence and defense startups, pointed to Elliptic’s potential as blockchain technology becomes more commonplace.
“We recognize that the firm’s monitoring capability will be an essential component of any blockchain in the future, and we will help Elliptic to expand in the U.S., via our contacts and knowledge of U.S. law enforcement and government agencies,” said Paladin executive and retired Lieutenant General Kenneth Minihan, who was also a former director at the National Security Agency, according to reports.
The company is based in the U.K. and secured $2 million in funding in 2014.