Startup Elliptic has closed a $5 million Series A funding round led by Paladin Capital Group, as it seeks to cash in on the distributed ledger craze with its technology for identifying illicit activity on the blockchain.
Santander InnoVentures, KRW Schindler, Digital Currency Group, and existing investor Octopus Ventures also joined the round. Paladin MD Christopher Steed will join the Elliptic board alongside Octopus Ventures, and Santander InnoVentures will join as a board observer.
Launched in 2013, with offices in London and New York, Elliptic uses graph analysis and machine learning to sniff out illicit activity in blockchain transactions. The firm claims top US and European Bitcoin exchanges and payment processors as customers and says it has also helped law enforcement agencies, providing actionable evidence on crimes such as arms trafficking and drug sales.
With firms and governments around the world investigating the use of distributed ledger technology for a host of purposes, the startup is confident of winning new business and says that the new funding will help it "consolidate its position as the global benchmark in blockchain compliance, fraud detection, and investigations technology".
Mariano Belinky, managing partner, Santander InnoVentures, says: "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. Elliptic is an authority in this area. We are delighted to be working with the team to help realise the potential of this exciting new technology."