Elliptic raises $23M Series B funding backed by Wells Fargo to help banks manage cryptocurrency risks

Elliptic, a London, England-based startup that makes cryptocurrency transaction activity more transparent and accountable, has raised $23 million Series B funding to invest in its discovery product and help accelerate global expansion, with a particular focus on Asia. Wells Fargo contributed $5 million into the round, with the remaining funding coming from other investors.

Founded in 2013 by Adam Joyce, James Smith, and Tom Robinson, Elliptic protects businesses against financial crime in cryptocurrency and helps banks manage the risks associated with being exposed to cryptocurrencies. Elliptic is disrupting illicit activity in cryptocurrencies and stopping criminals from undermining the ideals on which cryptocurrencies are built. Their team pushes the limits to dig beneath the surface, peeling back the layers to expose the truth. The company is preventing, detecting, and pursuing criminal activity in cryptocurrencies. It identifies illicit activity in cryptocurrencies, providing actionable intelligence to cryptocurrency companies, financial institutions and government agencies.

Since founded seven years ago, Elliptic has been increasingly working with financial institutions to get them on board with its so-called Discovery platform, which helps banks identify whether clients’ funds are passing through cryptocurrency platforms without the appropriate compliance checks in place.

Financial institutions and cryptocurrency companies rely on Elliptic’s blockchain analytics to manage risk and meet regulatory compliance worldwide. The London-based firm has become known for its analysis tools, which it sells to some of the world’s largest cryptocurrency platforms — including Binance and Circle — to help them find and block illicit digital currency transactions.

For instance, the company’s technology 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.

“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 in an interview.