Wells Fargo joining Elliptic's funding round could be new chapter in compliance
Crypto-assets have come under the scrutiny of various governments over the past few years. In fact, just recently, markets like the U.S and Europe have made clear their plans to bring stringent regulations to curb tax irregularities, money laundering, and terror financing via crypto-channels. While studies have shown that just over 1% of total crypto-transactions are directed towards illegal activities, most governments have been wary of the disruption that crypto and digital assets could bring. Wells Fargo's recent association with Elliptic may be useful at such a time.
In a recent development that may come as a relief to many financial institutions who have to navigate the grey areas of crypto-asset management and regulations, Wells Fargo Strategic Capital (WFSC) has come on board to fund crypto-asset risk management solutions provider, Elliptic. The firm's Series B funding had raised around $28 million, at the time of announcement.
Tokyo-based SBI Group and Santander InnoVentures are also part of the diverse portfolio of investors backing Elliptic at the moment. The investment will enable Elliptic to expand its risk management tools on offer for financial institutions and also help the company with its global expansion.
The funding will also help Elliptic roll-out its risk management tool - Elliptic Discovery and hire more resources for its operations. Elliptic Discovery will help compliance teams by providing insights that will help identify the flow of funds to crypto-assets and the level of risk they possess. The tool will also provide detailed transaction details of over 200 global exchanges and help financial institutions meet regulatory requirements.
In the press statement, James Smith, CEO of Elliptic, had said,
"The partnership with our bank investors will further enhance our ability to better understand and work closely with financial institutions around the world to provide them with greater visibility into the crypto-asset ecosystem."
"Instead of leaving financial institutions in the dark regarding transactions in the emerging crypto-asset class, our aim is that Elliptic, working with financial institutions, will shine a light on any crypto-asset-linked transaction activity and enable them to manage risk accordingly."
Elliptic's latest announcement comes at a time when institutions are concerned about digital assets and their regulatory implications. The EU recently announced the fifth iteration of the Anti-Money Laundering Directive (5AMLD). Further, the Financial Action Task Force (FATF) also established its global regulatory guidelines for crypto-assets. The largest stablecoin, Tether (USDT), with a market cap of $4.6 billion recently announced that it has adopted a real-time anti-money laundering (AML) compliance solution that would track USDT tokens on the blockchain and flag irregularities.
Developments such as these strongly suggest that regulations are finally catching up to the changes in traditional finance and are now offering solutions to enhance compliance.
The post Wells Fargo joining Elliptic's funding round could be new chapter in compliance appeared first on AMBCrypto.