Elliptic, a bitcoin surveillance startup based in the United Kingdom, has raised US$5 million from prominent venture capital firms and angel investors to identify illicit activity on the Bitcoin blockchain and provide actionable intelligence to financial institutions and law enforcement agencies.
James Smith, one of the co-founders of Elliptic stated that the company’s software implements an artificial intelligence-based technology to explore the Bitcoin blockchain network for patterns of suspicious transactions and activity. The Elliptic platform can be used by online exchanges and law enforcement agencies to detect unusual transactions and track their sources and origins.
“People realise that if Bitcoin and blockchain is going to be taken seriously you have to start acting like the rest of the world,” said Smith.
One of the main criticisms targeted towards Bitcoin and its transactions are their anonymity. In nature, the Bitcoin network and its transactions are not transparent. Still, a substantially high number of criminals and money launderers use bitcoin to transfer money internationally. With sophisticated tools and blockchain explorers, some transactions can be traced back to its origin, making it possible for government agencies and law enforcement to track the initiators of the transaction. The elimination of fraudulent transactions and money laundering attempts would allow the Bitcoin network to become a more reliable and secure payment network.
The US$5 million funding round was led by Paladin capital’s managing director Kenneth Minihan, who is a former director of the US National Security Agency.
“Elliptic is a game-changer for blockchain and is already trusted by some of the smartest minds in law enforcement and compliance. The firm’s monitoring capability will be an essential component of any blockchain in the future and we will help Elliptic to expand in the US, via our contacts and knowledge of US law enforcement and government agencies.”
Elliptic previously raised US$2 million in 2014 from Octopus Investments for its Bitcoin vault services. The current funding round brings the total capital of the company to US$7 million. Over the next few months, the company will focus on the development and distribution of its bitcoin transaction identification software to reduce the criminal and illicit activity on the bitcoin blockchain.