Wells Fargo is making a major “donation” to the cryptocurrency community. The venture division of one of the world’s largest and most prominent banking institutions is putting $5 million into a startup called Elliptic, which is dedicated to providing risk management solutions for cryptocurrencies.
Wells Fargo Is Pushing Crypto Further
In a statement, James Smith – the CEO of Elliptic – explained:
We are proud to announce Wells Fargo’s investment in Elliptic. The partnership with our bank investors will further enhance our ability to better understand and work closely with financial institutions around the world to provide them with greater visibility into the crypto asset ecosystem. Instead of leaving financial institutions in the dark regarding transactions in the emerging crypto asset class, our aim is that Elliptic, working with financial institutions, will shine a light on any crypto asset-linked transaction activity and enable them to manage risk accordingly.
This latest $5 million from Wells Fargo completes a nearly $23 million funding round for Elliptic which was led by Japanese financial institution SBI Holdings Inc. Among the company’s biggest goals is expanding its territory in Asia and building its latest product known as “Elliptic Discovery.” This will allow banks to closely examine the cryptocurrency trading habits of their customers to see how much risk is likely to be involved.
Basil Darwish – the managing director of Wells Fargo Strategic Capital – commented:
We are pleased to participate in Elliptic’s Series B financing round and to support their mission of developing innovative risk management solutions. Since its inception in 2013, Elliptic has been a pioneer in developing a distinctive array of data sets and transaction monitoring tools. We are excited to invest in Elliptic and to help them execute the next phase of their business plan.
Many banks and institutions have sought to incorporate safer ways for their clients to trade and sell cryptocurrencies. The problem is that regulation just isn’t where it needs to be. Thus, while crypto trading is likely to dominate the future, legitimacy has failed to come about in reasonable time.
As a result, many traditional financial houses have turned their backs on cryptocurrency completely and have either forbidden such trades between customers or have refused to get involved. Thus, many exchanges have sought to ensure compliance efforts with international monetary organizations on their own, and Elliptic seeks to bring these companies and standard banks closer together.
Making Regulation Easier
Co-founder of the company Tom Robinson explained:
Previously, a bank just didn’t know much about the exchange that was wanting to open an account with them. This will give them insights into how risky or otherwise a given crypto exchange is.
Elliptic has been around for roughly seven years and developed some of the world’s first software for tracking illicit digital trades.