The latest investment brings Elliptic’s Series B raise to more than $28 million. Previous investors include Japan’s SBI Group and Santander InnoVentures, an investment branch of the Spanish bank.
Wells Fargo Strategic Capital, the venture arm of the fourth-largest bank in the U.S., is contributing $5 million to Elliptic’s Series B funding round. According to a Feb. 13 press release, the investment will help the company build products for large financial institutions.
The additional resources will be used to fuel Elliptic’s expansion in Asia. Additionally, the company hopes to accelerate development of Elliptic Discovery, a compliance solution for banks.
The system is designed to let banks correctly identify high-risk customers who transact with cryptocurrency exchanges. It will feature detailed profiles for more than 200 exchanges, providing more granular data on the level of regulatory compliance for each. This could help prevent indiscriminate countermeasures raised even against legitimate exchanges.
Global focus on money laundering
The past year has seen many governments around the globe made significant moves to fight money laundering.
In June, the Financial Action Task Force (FATF) issued a global regulatory framework that included directives for crypto assets. It focused on their assumed money laundering risk, mandating heightened identity checks – among other things.
The European Union proposed in 2019 and enacted in 2020 its fifth evolution of the Anti Money Laundering Directive (5AMLD). The regulations stipulate that all member countries must enforce compliance with anti-money laundering (AML) procedures, which include clear identification and an activity questionnaire. The directive explicitly called out cryptocurrency service providers.
In the U.S., the head of the Financial Crimes Enforcement Network (FinCEN) noted that exchanges and stablecoin providers must adhere to AML regulation.
Cointelegraph requested additional commentary from Elliptic, but did not receive an immediate response.
US Treasury to Monitor Libra Over Possible Financial Risks
The U.S. Department of the Treasury has committed to monitoring the Facebook-led cryptocurrency project Libra.
The news was announced by Emanuel Cleaver, II, congressman for Missouri’s fifth district, on Tuesday. Cleaver said he’d written to the Financial Stability Oversight Council (FSOC), and the Office of Financial Research (OFR) in August calling on the regulators to “proactively examine Libra and Calibra for possible systemic risk.”
Cleaver received a letter from back from the Treasury yesterday, confirming that there are many “unanswered questions” over Libra. The department said that as Congress “continues to examine these issues” it would “closely monitor this market to address any regulatory gaps that it identifies.”
The Treasury added:
“It is unclear whether U.S. and foreign regulators will have the ability to monitor the Libra market and require corrective action, if necessary. This concern must be addressed if the Libra is to launch.”
With Facebook’s global reach, Cleaver argued it’s “absolutely critical” that the project be “stringently” examined to ensure the cryptocurrency “does not pose a systemic risk to the global economy.”
While he applauded Facebook’s efforts to work with regulators on Libra concerns, Cleaver said it has “the potential to update – or upend – our financial system.”
“As Facebook works down this regulatory road, it is imperative that we affirm that terror financing and money laundering is not advanced through Libra, and, according to FSOC, significant concerns remain”, he concluded.
The announcement came a day before Facebook’s CEO Mark Zuckerberg is set to testify before the House of Representatives Financial Services Committee over Libra and other issues. The hearing is set for 14:00 UTC today and can be viewed live here.
