Elliptic, a London-based startup that provides analysis tools for financial services companies to help manage the risks associated with cryptocurrencies has recently received a whopping investment of $5 million from America’s third-largest bank, Wells Fargo, according to a Thursday report.
The investment comes the bank’s venture unit, Wells Fargo Strategic Capital. As per the reports, the investment is an extension of the firm’s September serial B funding, bringing the total of the funding round to $23 million.
Elliptic has built a reputation for itself in the blockchain sphere for its analysis tools that the firm provides to many leading cryptocurrency exchanges, including Binance and Circle to help them combat cases of crypto money laundering and fraud.
The startup has also been working closely with banks, helping them to conduct transactions on various cryptocurrency platforms without adequate regulatory requirements, through its platform dubbed “Discovery.”
The main goal of Discovery is to provide banks with information regarding the transactions of their customers in cryptocurrencies and to determine if there are risks of money laundering.
Banks getting interested!
The CEO and co-founder of Elliptic, James Smith said, “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.”
He also acknowledged the fact that a bank as large as Wells Fargo investing in their company is clear evidence that banks are getting interested in their services.
More and more financial institutions realize even if they don’t touch crypto themselves, they are adjacent to crypto. They are exposed to crypto and have a responsibility to understand what the risk is and to manage it.
Although several banks have refused to deal with cryptocurrencies in the past due to their high price volatility and their tendency of being used in money laundering and fraud.
However, Smith is optimistic that this stance will soon change.”It’s no longer okay for a bank to stick their heads 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,” he said.
Elliptic’s Capital Above $40M
With this investment from Wells Fargo, the company’s total capital has been raised to over $40 million, although they did not disclose their exact worth.
The startup will use this new capital to invest in its Discovery product and also expand into various markets particularly Asia, seeing as most countries like Japan and Singapore have grown considerably in the cryptocurrency industry.
The Elliptic Discovery product was launched in December 2019 and with this new capital, the company will invest in it and make it better.