Wells Fargo, the fourth-largest bank in the world, has set its eyes on the blockchain technology sector, making an investment into London-based cryptocurrency compliance firm Elliptic. This was reportedly done by Wells Fargo’s venture unit, to accelerate development of Elliptic’s product that helps banks to assess hundreds of crypto exchanges operating worldwide.
Called ‘Elliptic Discovery,’ this solution is purpose-built for banks to enable them identify crypto exchanges that are complying with strict regulatory standards. Discovery boasts database of hundreds of exchanges, collected since 2013, including their owners, jurisdiction, regulatory status, and compliance policies.
The investment made by Wells Fargo Strategic Capital complements Elliptic’s Series B funding round led by Tokyo-based SBI Group in September 2019. At the time, the blockchain intelligence company raised $23 million including new investment from AlbionVC, and participation from existing investors SignalFire, Octopus Ventures, and Santander Innoventures.
Wells Fargo will pilot its own digital currency
The new investment, which brings the company’s total funding to over $40 million, will fuel Elliptic’s continuing expansion into Asia, with new offices opening in Japan and Singapore. The funding will also be used to accelerate product development to support an emerging class of asset-backed crypto-assets such as Facebook’s Libra, Line Corporation’s LINK and central bank digital currencies.
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Wells Fargo has already a cryptocurrency project in the works. The banking giant announced last year that it plans to pilot an international settlement service using its own ‘Wells Fargo Digital Cash.’
The new coin will run on its own distributed ledger technology platform. It will be used for cross-border payments and also automates the entire process alongside its settlement layer.
As such, investment in Elliptic Discovery could offer a broad range of identifiers and risk indicators to help Wells Fargo, in case it decides to expand its coin reach, assess the risk posed by their exposure to crypto-assets.
Wells Fargo had been among global banks that were once skeptical about cryptocurrencies and until now it bans the purchase of Bitcoin by credit-card customers, due to the volatility of the investment.