Cryptocurrency-based personal banking company Wirex Ltd. and anti-fraud security intelligence and compliance outfit Elliptic Enterprises Ltd. today announced an alliance for developing solutions for rapidly detecting fraud and other criminal activity.

The two companies have been working together since 2016 and this new solution will provide customers even more comfort and security with their cryptocurrency stored in wallets. Cryptocurrencies are a form of digital money, the most well-known example being bitcoin. The currency is supported by a globally shared digital ledger, called a blockchain, that uses cryptography to secure and record transactions.

This collaboration will allow Wirex to red-flag wallet addresses associated with illegal and suspect activity. This will open up a new data model built on industrywide best practices designed to reduce the risk of fraud and promote the benefits of cryptocurrency to a wider audience.

“We have entered a new age in which conventional regulated financial frameworks and the new token economy must coexist,” said Pavel Matveev, co-founder and chief executive of Wirex. ”By uniting the existing and future financial ecosystem, Wirex occupies a unique position in the industry — we believe it is our duty to deliver innovation and choice to our customers whilst ensuring the security of their money and data.”

Although bitcoin is the most popular example of a cryptocurrency, numerous currencies and tokens have been generated over the years. Cryptocurrency tokens became a prominent way for blockchain-related startups to raise initial capital called an “initial coin offering.”

During 2017, ICOs exceeded expectations at an estimated $11.9 billion, but a study by Statis Group revealed that almost 80% of ICOs during 2017 were scams. And that represents just new tokens generated for the purpose of raising money. There’s also a certain amount of fraud, criminal activity and money laundering committed with established currencies such as bitcoin, Ethereum and Litecoin.

Because of the need for industrywide compliance with anti-money-laundering laws, local finance laws and other regulations designed to protect customers from criminality and fraud, businesses working with cryptocurrency can find themselves in the crosshairs of both the law and consumer fears.

Wirex provides consumers and businesses a way to mix cryptocurrency and traditional currency for personal finance by offering secure, multicurrency wallets that enable fast and efficient domestic and international payments. Wirex customers can also spend cryptocurrency as easily as cash using the Wirex Visa Card.

Elliptic’s service has been used to assess millions of transactions, estimated at a total value exceeding several trillion dollars, in order to detect risk and avoid problematic criminal activity. That enables cryptocurrency exchanges, brokers, banks and other financial institutions across the world to prevent fraud and other criminal activity.

“Our new working arrangement with Wirex will play a significant role in helping cryptocurrency become more trusted and commonplace,” said Elliptic co-founder and CEO James Smith.

Wirex’s insights into digital and traditional currency exchanges will now be fed directly into Elliptic’s database. That will enable institutions to more rapidly identify financial crime, such as stolen credit cards, that can ultimately lead to cryptocurrency wallet addresses being used for money laundering. Any suspicious behaviors are now automatically added to the dataset of high-risk actors.

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