Odaily Frontline | Crypto Startup Elliptic Raises $23 Million in Series B Funding Led by SBI

This article comes fromCoinDesk, by Ian Allison

Odaily Translator |

Odaily Translator |

Blockchain forensics firm Elliptic has raised $23 million in a Series B round led by Tokyo-based financial institution SBI Holdings.

The funding will help fuel Elliptic's expansion in Asia, the company announced Wednesday. Elliptic recently opened an office in Singapore and is opening an office in Japan this week.

Tomoyuki Nii, executive director in charge of overseas investments at SBI Investment, will join Elliptic's board of directors. SBI contributed $10 million to the round, he told CoinDesk. AlbionVC also participated in the financing, along with existing investors including SignalFire, Octopus Ventures and Santander Inventures (note: AlbionVC's Ed Lascelles will also join Elliptic's board of directors).

According to Elliptic CEO and founder James Smith, Tokyo and Singapore are attractive locations to do business not only because of their vibrant crypto communities, but also because of the technologically advanced regulators in these regions.

• Smith told CoinDesk: “The Monetary Authority of Singapore and the Japanese Financial Services Agency (JFSA) understand the crypto industry very well, and Japan has its own exchange licensing system. I think all of these are key to the development of the crypto industry. , because once you set the ground rules, then businesses can come in and innovate.”
  

Not just the Asian market

Elliptic uses artificial intelligence and machine learning techniques to track and locate suspicious transactions on the blockchain. Elliptic will be used across SBI’s suite of crypto businesses, including its exchange, VC trading and custody businesses, and more broadly across SBI’s portfolio of blockchain companies and its banking and financial partners, Smith said.

Smith added: "This will create a strong market push and we will work with SBI to capture the Japanese market and then expand more broadly to other markets in Asia."

Founded in 2013, Elliptic previously raised $12 million in 5 rounds of financing, including seed and A rounds. The most recent round took place in December 2017, with SignalFire leading the round and raising a total of $5 million.

Beyond Asia, Elliptic's funding will also be used to develop surveillance services for Facebook's Libra network and emerging central bank digital currencies (CBDCs).

• Speaking of Libra, Smith said: "I think it could be a huge leap forward in terms of wider adoption of digital currencies, and we're going to make sure it's supported by our platform."
  

XRP factors push

In addition to building a number of crypto-oriented businesses, SBI Holdings (note: formerly Softbank Investment) is the largest external investor in XRP, the native cryptocurrency of Ripple's blockchain system.

SBI’s Nii said SBI has ambitious plans to build an XRP ecosystem in Japan, where the token has quite a “hardcore following.” This is one of the reasons why Elliptic attracted SBI because it happens to be the best blockchain forensics company for XRP. Nii told CoinDesk: “The great thing about Elliptic is that they can track XRP — unlike some of the other anti-money laundering (AML) platforms. We looked at these companies and I actually think Elliptic’s product is the best at AML .”

Smith said Elliptic does not disclose which cryptocurrencies it monitors, but he said many clients have inquired about XRP, especially as Elliptic turned its attention to Asian markets. According to Smith, the Ripple ledger carries a lot of data on-chain because of the way market makers are built into the system resulting in a lot of buy and sell information about transactions.

“There’s a huge amount of data on the Ripple blockchain, just in terms of data, it’s probably the biggest blockchain of all, so much information is recorded on-chain. The way it’s used with some of the other cryptocurrencies is also It’s slightly different because there are more financial institutions like SBI that do it as part of their business operations,” Smith explained.