Wells Fargo Strategic Capital (WFSC) is backing the London-based blockchain analysis firm Elliptic with a $5 million investment, bringing the startup’s Series B round to $28 million, Elliptic announced in a press release on Thursday (Feb. 13).
WFSC joins existing investors SBI Group and Santander InnoVentures. The funding will enable Elliptic to expand across Asia and collaborate with financial institutions for an increased understanding of the cryptocurrency ecosystem.
The additional investment brings the company’s total money raised to over $40 million. Elliptic, founded in 2013, has become known for cryptocurrency platform tools that help find and block illicit transactions. The funds are also being used to accelerate the launch of its new risk management solution, Elliptic Discovery.
The Elliptic Discovery platform offers insights to compliance teams to identify the flow of funds into and out of crypto assets and understand any risks. Detailed transaction profiles are available of over 200 global crypto exchanges.
“If they see payments going between their customers and one of a long list of crypto entities, they can understand more about who that entity is and whether it’s something they should be concerned about,” Elliptic Co-Founder and CEO James Smith told CNBC.
Elliptic’s global expansion comes as crypto industry regulatory focus grows and compliance solutions sought. The Financial Action Task Force (FATF) recently developed a regulatory framework for crypto assets worldwide.
“More and more financial institutions realize 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,” Smith said. “It’s no longer OK for a bank to stick their head in the sand and pretend it doesn’t exist. Crypto is here to stay and whether or not you want to participate in it, some of your customers will be.”
Basil Darwish, managing director, Wells Fargo Strategic Capital, said they are supportive of Elliptic’s goal of establishing “innovative risk management solutions” calling the startup “a pioneer.”
The Bank of International Settlements (BIS) said in December that central banks have to embrace the revolution in digital money.