The blockchain forensics company Elliptic has announced a new tool designed to help banks visualize illegal activities when dealing with Bitcoin-based startups. The firm has partnered with Silvergate Bank, a financial institution that has made connections with quite a few businesses within the Bitcoin industry.
Blockchain surveillance operations seem to be making headway with law enforcement agencies and financial businesses worldwide. This week, the startup Elliptic has announced a new monitoring tool and the company’s partnership with Silvergate Bank. According to Elliptic, the platform which the two firms designed will give financial institutions better insight into Bitcoin-related risks that don’t comply with current regulatory standards.
Founded in 2013 by James Smith, Adam Joyce, and Tom Robinson, Elliptic has raised US$7 million since the company’s inception. Investors injecting money into Elliptic’s coffers include Digital Currency Group and banks like Santander.
Moreover, the startup claims that it has already produced substantial evidence for law enforcement agencies worldwide.
“Our proprietary database links millions of Bitcoin addresses to thousands of clear web and dark web entities,” Elliptic’s website details. “We back this up with transparent documentary evidence. We have delivered actionable evidence in cases involving international arms trafficking, money laundering, theft, and drug offenses.”
The company became well known when it introduced the “Bitcoin Big Bang,” a visualization tool that analyzes “the emergence over time of the largest entities on the Bitcoin blockchain, and their interconnectivity.”
Relying on Tools Rather than the Word of the Exchange
The latest tool from the London-based blockchain surveillance startup will help banks when dealing with Bitcoin-based companies in order to stay compliant with regulatory guidelines.
“The banks that are working with Bitcoin companies really don’t have much visibility into how effective they are at handling the risk associated with Bitcoin transactions,” explained James Smith, the CEO at Elliptic.
Until now, they pretty much have had to rely on the word of the exchange or whoever says ‘we’re doing the best we can’.
Will Banks Get Comfortable With Bitcoin?
The news comes at a time when banks have been known to stop working with Bitcoin companies like exchanges when it comes to accounts and operations like wire transfers. Over the past two weeks, quite a few bitcoin trading platforms have had issues dealing with financial institutions and their de-risking methods. Elliptic and Silvergate Bank believe giving banks better visibility will make things easier for both parties.
The Californian financial institution has bolstered Bitcoin for quite some time. The president and CEO of Silvergate Bank, Alan Lane, has been trying to get bankers to discuss the subject of digital currencies at California Bankers Association meetings. Furthermore, the bank has made connections with fifteen Bitcoin businesses and other members of the blockchain industry in order to further its goals. With a network of banking institutions and Bitcoin companies using Elliptic’s new tool, the two firms hope it will bring more confidence to financial incumbents dealing with the cryptocurrency.