Bitcoin surveillance startup Elliptic Enterprises Ltd. has raised $5 million Series A in a round led by Paladin Capital Group which included Santander InnoVentures, KRW Schindler, Digital Currency Group and Octopus Ventures.

Founded in 2013 originally as a Bitcoin storage solution, Elliptic now offers a Bitcoin surveillance service for law enforcement and Bitcoin companies that can identify illicit activity on the Bitcoin Blockchain.

The company’s software uses artificial intelligence to explore the Bitcoin Blockchain network for patterns of suspicious transactions and activity and allows users to detect unusual transactions and track their origin.

Given that it tracks transactions on the Blockchain, Elliptic’s software can also be applied to any Blockchain derived service, meaning that they are also able to support financial institutions currently investigating, or implementing Blockchain derived solutions for internal and external transactions.

“Elliptic is a game-changer for blockchain and is already trusted by some of the smartest minds in law enforcement and compliance,” Kenneth Minihan, former director of the US National Security Agency and now Managing Director at Paladin, told The Telegraph. “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.”

Safer Bitcoin

While the appeal of Bitcoin for many has been its relative anonymity, that has also served as a hurdle for expanded use of the cryptocurrency; the real world doesn’t like anonymity, and companies are often fearful of embracing Bitcoin because of this.

“People realise that if Bitcoin and Blockchain is going to be taken seriously you have to start acting like the rest of the world,” Co-founder Dr James Smith noted.

Elliptic’s solution isn’t the full solution for a company that is afraid of using Bitcoin, but it goes a long way in assisting them by offering protection against illicit activity.

Including the new round Elliptic has raised $7 million to date with previous funding coming from Seedcamp and John Power.

The company said it would use the new funds to expand a recently-opened office in New York and to target big banks that want to use Blockchain technology.

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