Wells Fargo made a $5 million investment in the startup Elliptic, which is known for connecting crypto exchanges with banks.
The announcement was made on Thursday that Wells Fargo Strategic Capital (WFSC) has helped Elliptic to raise $28 million in a Series B funding. Elliptic says part of the investment is aimed for a product that has been launched recently and is looking to help crypto exchanges win over banks.
The product is called Elliptic Discovery and already used by more than 200 cryptocurrency exchanges from all over the world. It covers everything, from checks on whether the exchanges are regulated or not to know-your-customer (KYC) compliances. This is what Elliptic’s co-founder Tom Robinson has to say about Elliptic Discovery:
“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.”
Banks Have Been Avoiding Crypto Businesses
Most of the major banks have been avoiding crypto businesses for the reason that potentially unsavory transactions involve too many risks and were believed to not bring any benefits. Only a few small financial institutions such as Signature Bank and Silvergate were taking care of exchanges until now. Robinson thinks that helping banks to hook up with exchanges is not appreciated enough and that Elliptic does it regardless of this.
Elliptic Is Believed to Have a Bright Future
Intermediary firms like Elliptic and Chainalysis, which is backed by a bank, are believed to have a great future seeing law enforcement agencies are nowadays clearer when it comes to crypto regulations. While Elliptic didn’t receive only the attention of Wells Fargo, this bank is surely the first one in the US to take interest in the startup.
In September 2019, Japan’s banking group SBI Holdings made a $10 million investment in Elliptic to help it expand in Asia. Some other banks that invested in the firm are SignalFire, Octopus Ventures, AlbionVC and Santander InnoVentures.