London and New York-based blockchain intelligence firm Elliptic has received $5m (£3.5m) in Series A funding to help crackdown on bitcoin crime, it announced today.
Elliptic, which launched in 2013, uses graph analysis and machine learning to identify illicit activity in blockchain transactions. Blockchain, a decentralised ledger of transactions, is the technology underpinning cryptocurrencies such as bitcoin.
The funding boost will help the financial technology, or fintech, start-up to build on its work with global law enforcement agencies, where it has provided evidence to tackle sophisticated cybercrimes such as arms trafficking, drug sales, extortion, theft and money laundering.
"Over the last three years we have built a top-tier client base. Our products have already been used to assess risk on blockchain transactions worth billions of dollars, and we have delivered key evidence in major criminal investigations in the US and Europe," Elliptic co-founder and chief executive, James Smith, said.
"We have already been able to expand operations to the US and will continue to extend our portfolio of products."
The funding round was led by Paladin Capital Group, a Washington DC-based multi-stage private equity firm, with participation from Santander InnoVentures, KRW Schindler, Digital Currency Group and existing investor, Octopus Ventures.
Christopher Steed, Managing Director of Paladin Capital Group, will join Elliptic’s board of directors alongside Octopus Ventures, and Santander InnoVentures will join as a board observer.
"Elliptic has demonstrated a powerful working product that can combat illicit activity on blockchains. Elliptic is a game-changer for blockchain and is already trusted by some of the smartest minds in law enforcement and compliance," lieutenant general (ret.) Kenneth Minihan, managing director at Paladin Capital, said.
"We recognise that the firm’s monitoring capability will be an essential component of any blockchain in the future and we will help Elliptic to expand in the US, via our contacts and knowledge of US law enforcement and government agencies."
In 2015, Elliptic was awarded the security product of the year award by The Banker magazine and was selected by KPMG as a "Top 10 Global Emerging Star" among fintech startups in 2016.