Financial institutions across the globe have more often than not eschewed business from cryptocurrency-related enterprises including cryptocurrency exchanges. However, London-based blockchain analytics and compliance firm Elliptic thinks that this is missing a business opportunity just because the banks lack the necessary information to make an informed decision.
The company has been working on a solution to correct this situation and on Wednesday it announced the launch of ‘Elliptic Discovery’, a solution that “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 these exchanges” according to a press release by the company.
Elliptic Discovery is aimed at banking institutions that wish to understand the business of cryptocurrency exchanges in order to comply with strict banking regulations.
“Purpose-built for banks, Elliptic Discovery provides compliance teams with the insights they need to identify flows of funds into and out of crypto-assets and assess the risk that they pose.”
The solution will enable banks to learn about these businesses by serving them with information such as “jurisdiction, regulatory status, compliance policies as well as blockchain insights into the provenance of crypto-assets that they have handled.” The data in Elliptic’s arsenal has been accumulated since 2013 and covers at least 200 crypto exchanges.
“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,” Dr. James Smith, CEO, and Co-founder of Elliptic said in a statement on Wednesday. “Elliptic Discovery changes that by enabling banks to shine a light on their customers’ crypto-asset activity and take a risk-based approach. 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 does not reveal the banking clients that have signed up to use the Discovery feature but it does mention that the development of the solution was advised by the client’s needs.
“Elliptic Discovery was developed in close cooperation with a number of financial institutions, including many of Elliptic’s investors and current customers,” Elliptic wrote in the release.
The analytics firm enjoys backing from some of the leading banking institutions such as SBI Group and Santander‘s venture capital arm Santander InnoVentures but that does not necessarily mean that they have automatically signed on to use the solution, however, it is most likely that they are some of the first clients to be able to use the service.