MarketElliptic, a provider of crypto-asset risk management solutions for financial institutions, has launched Elliptic Discovery. Purpose-built for banks, Elliptic Discovery provides compliance teams with insights into flows of funds in and out of crypto-assets and so enable risk assessment. Detailed profiles of over two hundred global crypto exchanges will assist banks manage those risks and meet regulatory requirements.

Dr James Smith, CEO and Co-founder, Elliptic
Dr James Smith, CEO and Co-founder, Elliptic

For too long, banks’ lack of visibility into the crypto-asset ecosystem has led to zero-tolerance for this emerging asset class. This has frustrated their customers, while they have remained blind to the actual risks posed by their exposure to crypto-assets. Elliptic Discovery changes that by enabling banks to shine a light on their customers’ crypto-asset activity and take a risk-based approach,” said Dr James Smith, CEO and Co-founder, Elliptic.

Not all crypto-asset exchanges are alike and Elliptic Discovery will allow banks to make this distinction and seize the opportunity to work more closely with these businesses, based on an evidence-based assessment of the risk.

Elliptic Discovery – background

Built on Elliptic’s established data, which it has collected since 2013, Elliptic Discovery offers a broad range of identifiers and risk indicators to allow banks to identify and assess the risk posed by their exposure to crypto-assets through crypto exchanges. This includes information about these businesses’:

  • corporate entities
  • jurisdiction
  • regulatory status
  • compliance policies
  • blockchain(s)
  • provenance of crypto-assets handled.

With Elliptic Discovery, banks can navigate the ever-evolving crypto ecosystem in order to:

  • understand a bank’s overall exposure to crypto-assets ocurring through customer activities
  • identify customers whose crypto-asset activities suggest money laundering or sanction-breaking risks
  • assess the risk profiles, and KYC procedures, of different crypto-asset exchanges – thereby enabling a banks to work more closely with these crypto-asset exchanges.

Elliptic Discovery development

The rise of cryptocurrencies has brought all the properties of cash into the digital world. This means users want to transact online, across borders and with enhanced user privacy. As a result, they have – perhaps but not always unwittingly – become key enablers of crimes committed online. Cryptocurrencies facilitate the illegal trade of:

  • drugs
  • weapons
  • stolen credit cards
  • stolen IDs
  • child sexual abuse material
  • ransomware-as-a-service.

To address these Elliptic developed Elliptic Discovery in close cooperation with selected financial institutions, many of whom are Elliptic’s investors and current customers. These banks had expressed a desire to understand and better manage their interactions with a range of crypto businesses.

With its existing business based on assessing transactions risks, Elliptic has, to date, ‘assessed’ transactions worth multiple trillion dollars. It has uncovered activities related to:

  • money laundering
  • terrorist fundraising
  • fraud
  • other financial crimes.

Increasing transparency between traditional financial institutions and crypto businesses should:

  • benefit both sides (traditional banks and unconventional crypto-exchanges)
  • help grow the crypto market overall by equipping financial institutions with the insights needed to manage risk based on each bank’s own criteria.

Enterprise Times: what does this mean

Use of the dark web is increasing. Cryptocurrencies on crypto exchanges have become a primary means of exchange. Despite the ‘disbelief’ of traditional bodies like the Bank for International Settlements, adoption of crypto marches on.

Financial institutions need, therefore, to be able to engage with crypto exchanges and assess the risks associated with crypto-assets. This is what Elliptic Discovery promises. Only by being able ‘see into the crypto world’ might financial institutions ease restrictive policies on crypto-asset activity. That said, Elliptic does not provide much information about the practicalities of what Elliptic Discovery offers.


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