Wells Fargo Invests $5M in Startup Connecting Crypto Exchanges and Banks

Banking big Wells Fargo is backing blockchain forensics agency Elliptic.

Introduced Thursday, the recent $5 million from Wells Fargo Strategic Capital (WFSC) brings Elliptic’s Collection B as much as a complete of $28 million. The funding is partly geared towards a not too long ago launched product that helps crypto exchanges win banking relationships, Elliptic stated.

The product, Elliptic Discovery, offers a invoice of well being for over 200 crypto exchanges worldwide, protecting every little thing from how they conduct know-your-customer (KYC) checks to whether or not they’re regulated within the first place.

“Beforehand, a financial institution simply did not know a lot in regards to the trade that was eager to open an account with them,” Elliptic co-founder Tom Robinson advised CoinDesk. “This can give them insights into how dangerous or in any other case a given crypto trade is.”

Nearly all large banks have prevented crypto companies as a result of the perceived danger of coping with doubtlessly unsavory transactions was thought to outweigh the advantages. The job has been left to a handful of smaller monetary establishments, together with the U.S.-based Silvergate and Signature banks.

Serving to banks hook up with exchanges is a use case that is most likely underappreciated, stated Robinson. “Elliptic Discovery actually does assist a financial institution to have interaction extra intently with crypto exchanges,” he stated.

Wells Fargo shouldn’t be the one financial institution to have taken an curiosity in Elliptic, however it’s the first one from the U.S. 

Final September, Japanese banking group SBI Holdings invested $10 million to assist drive Elliptic’s Asian enlargement plans. Different traders embody Santander InnoVentures, SignalFire, AlbionVC and Octopus Ventures.

“We’re excited to put money into Elliptic and to assist them execute the following section of their marketing strategy,” stated Basil Darwish, managing director for strategic investments at Wells Fargo, in a press release.