Firm that detects crypto crimes raises $23m for Asia expansion

Edmund Heaphy
Finance and news reporter
Elliptic primarily detects and investigates cryptocurrency-related crimes. (Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Elliptic, a London-based firm that detects and investigates cryptocurrency-related crimes, said on Wednesday that it had raised $23m (£18.9m) in new investment to fund its ongoing Asian expansion.

The company, which was co-founded in 2013 by Oxford and Imperial College London PhD scientists, counts as customers over 100 cryptocurrency businesses and financial institutions across the world.

The round of funding was led by SBI Group, a major Japanese financial services group based in Tokyo. Tomoyuki Nii, an SBI Group executive, will join the board of Elliptic.

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The partnership with SBI Group, Elliptic said in a statement, will “enable a new wave of established financial institutions” to use its products.

In addition to funding its continued expansion into Asia, the Series B investment — its second round of funding since it hit initial milestones — will also allow it to further develop products for asset-backed crypto-assets like Facebook’s (FB) Libra, Elliptic said.

Focusing primarily on Bitcoin and Ethereum, Elliptic says it screens billions of dollars in transactions every day to assess them for links to illegal or illicit activity, like money laundering, terrorist financing, and evasion of economic sanctions.

London-based investment firm AlbionVC also participated in the round, as did previous Elliptic investors SignalFire, Octopus Ventures, and Santander Innoventures.

In 2014, Elliptic launched what it says was the world’s first cryto-asset transaction monitoring system with a view to helping businesses “safely engage” with these new kinds of assets.

“Financial institutions can no longer ignore the risks and opportunities presented by crypto-assets, and we are here to support them,” said James Smith, the CEO and co-founder of Elliptic.

“Elliptic’s work to enable trust, transparency, and accountability within the industry has played a critical role in the push beyond cryptocurrency’s experimental phase,” he said.

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The funding round comes as crypto-related offerings face increasing scrutiny from regulators.

The Bank of England, the UK Treasury, and the UK’s top financial regulator are currently working together to scrutinise Libra, Facebook’s controversial new cryptocurrency project.

It also comes at a record time for venture capital investment in European companies.

Start-ups based here raised a record €10.6bn in venture capital during the first six months of 2019, a 61% increase on the same period last year.

Technology-related companies remained the main recipient of VC funding, securing around 80% of investments in the first quarter of 2019.