WELLS FARGO INVESTS $5M IN CRYPTO EXCHANGES

Wells Fargo Invests $5M in Startup (ELLIPTIC) Connecting Crypto Exchanges and Banks

Here’s an interesting read for all of you who enjoy keeping up with the business world!

Announced Thursday, the fresh $5 million from Wells Fargo Strategic Capital (WFSC) brings Elliptic’s Series B up to a total of $28 million. The investment is partly geared toward a recently launched product that helps crypto exchanges win banking relationships, Elliptic said.

The London-based firm has become known for its analysis tools, which it sells to some of the world’s largest cryptocurrency platforms — including Binance and Circle — to help them find and block illicit digital currency transactions.

The product, Elliptic Discovery, provides a bill of health for over 200 crypto exchanges worldwide, covering everything from how they conduct know-your-customer (KYC) checks to whether they’re regulated in the first place.

Almost all big banks have avoided crypto businesses because the perceived risk of dealing with potentially unsavory transactions was thought to outweigh the benefits. The job has been left to a handful of smaller financial institutions, including the U.S.-based Silvergate and Signature banks.

The currency, called Wells Fargo Digital Cash, will be linked to the U.S. dollar and transferred using the bank’s distributed ledger technology to keep track of payments within its internal network.

The system will allow the bank to bypass third parties in the asset transfer process saving costs and time, said Lisa Frazier, head of the Innovation Group at Wells Fargo.

Wells Fargo is the first U.S. bank that has invested in Elliptic. Last September, Japanese banking group SBI Holdings led Elliptic’s $23 million round, and Spanish bank Santander is also an investor in the firm via its InnoVentures unit.

Today’s investment brings Elliptic’s total funding to date to $40 million.

What are your thoughts on this?

Source: Coindesk, The Block Crypto, CNBC, REUTERS