Wells Fargo Strategic Capital, the venture arm of the fourth-largest bank in the U.S., is contributing $5 million to Elliptic’s Series B funding round. According to a Feb. 13 press release, the investment will help the company build products for large financial institutions.
The latest investment brings Elliptic’s Series B raise to more than $28 million. Previous investors include Japan’s SBI Group and Santander InnoVentures, an investment branch of the Spanish bank.
The additional resources will be used to fuel Elliptic’s expansion in Asia. Additionally, the company hopes to accelerate development of Elliptic Discovery, a compliance solution for banks.
The system is designed to let banks correctly identify high-risk customers who transact with cryptocurrency exchanges. It will feature detailed profiles for more than 200 exchanges, providing more granular data on the level of regulatory compliance for each. This could help prevent indiscriminate countermeasures raised even against legitimate exchanges.
Global focus on money laundering
The past year has seen many governments around the globe made significant moves to fight money laundering.
In June, the Financial Action Task Force (FATF) issued a global regulatory framework that included directives for crypto assets. It focused on their assumed money laundering risk, mandating heightened identity checks — among other things.
The European Union proposed in 2019 and enacted in 2020 its fifth evolution of the Anti Money Laundering Directive (5AMLD). The regulations stipulate that all member countries must enforce compliance with anti-money laundering (AML) procedures, which include clear identification and an activity questionnaire. The directive explicitly called out cryptocurrency service providers.
In the U.S., the head of the Financial Crimes Enforcement Network (FinCEN) noted that exchanges and stablecoin providers must adhere to AML regulation.
CryptoX requested additional commentary from Elliptic, but did not receive an immediate response.
