The American bank Wells Fargo invests USD $5 Million in Elliptic, a well-known startup that connects banks with exchanges
Recently it has been reported that Wells Fargo Strategic Capital (WFSC) invested USD $5 million in Series B of Elliptic, the startup specializing in connecting banks with exchanges. The total amount of investment in the startup based in London, United Kingdom, amounted to a total of USD $28 million.
The startup said the investment is partly oriented towards Elliptic Discovery, a recently launched product that helps crypto exchanges connect with the banks.
A separate cut will be used in product discovery and the geographic expansion process of the startup, mainly focused on the Asian market.
Wells Fargo invests in Elliptic
Elliptic Discovery provides help to more than 200 crypto exchanges worldwide, covering the entire process of gaining banking relationships, from how they perform customer knowledge controls (KYC) to whether they are regulated in the first place.
Elliptic co-founder Tom Robinson told Coindesk news media:
“Previously, a bank simply didn’t know much about the exchange that would like to open an account with them. Now they will have information on how risky a crypto exchange is determined. ”
Almost all major banks have avoided crypto companies because of the risk of dealing with potentially risky transactions outweighing the benefits. The work had been left to a handful of smaller financial institutions, including the United States-based Silvergate and Signature banks.
Robinson said helping banks connect to exchanges is a use case that is probably not appreciated. He stated:
“Elliptic Discovery really helps a bank to engage more closely with crypto exchanges. Our product will allow us to adopt a risk-based approach and use our knowledge and data to identify those crypto exchanges with which they can do business safely. ”
Elliptic co-founder and CEO James Smith told CNBC that Wells Fargo’s support for the company shows that banks are “interested in (learning) how we can help them understand and manage crypto-related risk.”
More and more financial institutions realize, even if they do not touch crypto themselves, they are adjacent to crypto. They are exposed to cryptographic risk and have a responsibility to understand it and how to handle it.