Traditional banks are moving further away from a zero-tolerance stance on Bitcoin (BTC) and cryptocurrency. As bankers around the world investigate the rise of crypto, assessing how to interface with innovators and how to gain exposure to crypto, Wells Fargo, the fourth-largest bank in the United States with $503 billion in assets under management, has…
Traditional banks are moving further away from a zero-tolerance stance on Bitcoin (BTC) and cryptocurrency.
As bankers around the world investigate the rise of crypto, assessing how to interface with innovators and how to gain exposure to crypto, Wells Fargo, the fourth-largest bank in the United States with $503 billion in assets under management, has announced support for Elliptic, a leading provider of crypto asset risk management solutions for financial institutions. Wells Fargo Strategic Capital (WFSC) is investing $5 million in Elliptic’s Series B funding round which totals $28 million.
The WFSC investment will support Elliptic’s product Elliptic Discovery. The risk management tool helps banks navigate the wild west of crypto, steering compliant institutions clear of unregulated organizations and reducing the risk of exposure to exchange hacks and stolen funds.
According to the team at Elliptic,
“Purpose-built for banks, Elliptic Discovery provides compliance teams with the insights they need to identify flows of funds into and out of crypto-assets and assess the risk that they pose. Detailed profiles of over two hundred global crypto exchanges will enable them to manage risk, pursue new opportunities, and meet stringent regulatory requirements.”
With tumultuous episodes like the Mt. Gox meltdown, the Silk Road investigation, the Binance hack and several other high-profile security and compliance lapses linking cryptocurrencies to hackers, criminals and billions in tainted or stolen Bitcoin, Ethereum and other digital assets, industry leaders are developing tools that help distinguish blockchain technology from bad actors.
The goal is to support innovation while closing the types of loopholes that affiliate the industry with the darknet or terrorist financing. By producing advanced tools that provide auditable proof of identity for leading cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash and Litecoin, Elliptic plays a key role in legitimizing the space and bridging the gap between legacy players and the crypto-powered digital economy.
James Smith, chief executive officer of Elliptic, says the firm allows banks to take a risk-based approach by shining a light on their customers’ crypto-asset activity.
“For too long, banks’ lack of visibility into the crypto-asset ecosystem has led to zero-tolerance for this emerging asset class. This has frustrated their customers, while they have remained blind to the actual risks posed by their exposure to crypto-assets.”
Backed by SBI Group, AlbionVC, SignalFire, Octopus Ventures and Santander Innoventures, Elliptic addresses the gray area that has prompted US President Donald Trump, US Treasury Secretary Steven Mnuchin and many other world leaders to vilify cryptocurrencies as instruments that facilitate and benefit crime. By demystifying crypto operators and complex transactions, the London-based blockchain forensics firm is working to create a gateway for legacy players to enter the space with confidence.
Elliptic reports analyzing trillions in crypto transactions, uncovering illicit transfers related to money laundering, terrorist fundraising, fraud and other financial crimes.
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