Elliptic, a London and New York based firm successfully raised investment in its Series A funding round

Blockchain intelligence firm, Elliptic, secured $5 million in funding from a consortium of investors to further its risk assessment capabilities in law enforcement and financial services. 

Elliptic uses graph analysis and machine learning to identify illicit activity in blockchain transactions. As more companies and governments around the world adopt blockchain technology, Elliptic’s data and analytics services will be in strong demand in both the private and public sector. 

To date, Elliptic has assessed risk on more than $2 billion Bitcoin transactions. The company has also delivered key evidence in major criminal investigations in the US and Europe. Speaking about this new capital injection, Elliptic’s chief executive and cofounder Dr. James Smith, said: “Our new investors bring deep expertise in law enforcement, international financial services, and blockchain technology and we are excited to work with them on our next phase of growth. We have already been able to expand operations to the US and will continue to extend our portfolio of products.”

Elliptic launched in 2013, at the height of the bitcoin hype, when it was touted as the future of financial transactions. Since its launch in 2008, bitcoin has evolved from a idealised digital novelty to a tradeable currency with a total value of around £3.3 billion. 

Blockchain, the technology underscoring the digital currency, bitcoin, has grown in prominence as a transparent and secure way of recording transactions, agreements, contracts. Blockchain databases are distributed across thousands of computers across a network, making it harder for hackers to access data. At the same time, blockchain technology is known for its transparency: anyone on the network can access this digital ledger at any time. 

In praise for the technology, the UK’s chief scientific adviser encouraged the British government to adopt blockchain to ramp up security against hacking and security infringements earlier this year. One estimate projects bank spending on blockchain technology to reach $1 billion by next year. 

“Distributed ledger technology, including blockchain, has huge potential to deliver cost savings and new ways of working across the global banking industry – but most blockchain applications today are still in the proof of concept stage,” said Mariano Belinky, managing partner of Santander InnoVentures. “For distributed ledger technology to achieve widespread use, compliance departments and regulators will demand independent monitoring capabilities to combat insider trading, fraud, and money laundering,” he added. 

The company’s Series A funding round was led by Washington-based VC, Paladin Capital Group, with participation from Santander InnoVentures, KRW Schindler, Digital Currency Group, and existing investor, Octopus Ventures. Christopher Steed, Managing Director of Paladin Capital Group, will join Elliptic’s board of directors alongside Octopus Ventures, and Santander InnoVentures will join as a board observer.