Elliptic, a fintech company providing intelligence services for blockchain transactions, has concluded a US$5mn fundraising round led by Paladin Capital Group, and in which existing investor Octopus Ventures was joined by Santander InnoVentures, KRW Schindler, and Digital Currency Group.

Christopher Steed, managing director of Paladin Capital Group, has joined Elliptic’s board of directors alongside Octopus Ventures, while Santander InnoVentures is participating as a board observer.

Elliptic uses graph analysis and machine learning to identify illicit activity in blockchain transactions, and t
he funds will support product innovation for financial institutions and law enforcement agencies. 

“Over the last three years we have built a top-tier client base. Our new investors bring deep expertise in law enforcement, international financial services, and blockchain technology and we are excited to work with them on our next phase of growth. We have already been able to expand operations to the US and will continue to extend our portfolio of products,” says Elliptic CEO and co-founder James Smith.

“Distributed ledger technology, including blockchain, has huge potential to deliver cost savings and new ways of working across the global banking industry – but most blockchain applications today are still in the proof-of-concept stage,” comments Mariano Belinky, managing partner of Santander InnoVentures. “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.”

Launched in 2013, Elliptic’s compliance and fraud detection technology is used by US and European bitcoin exchanges and payment processors to assess risk on more than US$2bn in bitcoin transactions. It has also provided law enforcement agencies with actionable evidence on crimes involving international arms trafficking, drug sales, extortion, theft and money laundering.