Elementus, which seeks to locate illicit transactions involving digital currency, has garnered nearly $4 million in funds from Fidelity Investments, a company that has become rather friendly with crypto over the past year.
Elementus Is Getting the Money It Needs
The funding round was led by Morgan Creek Digital and saw several other institutions pledging their dollars and cents towards the company including Avon Ventures and Devonshire Investors. In addition, Stage 1 Ventures and Robot Ventures also took part in the round.
One of the biggest problems stemming from crypto use is that bitcoin and other digital assets are often being used for illicit purposes. Some of these concerns stem from scenarios involving money laundering and tax evasion, while others involve purchases of drug paraphernalia, guns or other illegal goods through black markets. In addition, terrorist funding is also a serious worry amongst crypto analysts.
Elementus seeks to locate these problems before they occur by looking through blockchain networks with a fine-tooth comb. Granted a transaction appears suspicious, representatives of the company step in to locate the source of the funds and determine how the money is being used. The interesting notion behind bitcoin is that it is widely categorized as a private or anonymous coin when, in fact, all transactions are recorded on the blockchain to provide immutable evidence that money transfers are real and valid.
Most of the time, it is exchanges themselves seeking the aid of Elementus to ensure know your customers (KYC) protocols are serving the right purposes. In addition, law enforcement agencies are likely to contact Elementus for assistance granted they need information regarding potential white-collar crimes and financial know-how.
Other companies doing what Elementus does include Elliptic, Chainalysis and Cipher Trace. Elementus co-founder Mike Kalomeni, however, believes that his company has a serious advantage. In a recent interview, he states:
We came up with algorithms that let us know exactly the provenance of the funds to an infinite number of [transaction] hops, automatically.
Understanding What Happens When Money Is Moved
The idea of tracking blockchain transactions has proven controversial for some who claim that cryptocurrency use should remain private, decentralized, and at the discretion of the parties involved. For every person calling for regulation, there is likely one asking that the crypto space be left as is, though itâ€™s likely their arguments could change should their funds ever be stolen or fall victim to hackers.
Fidelity Investments is solidifying its reputation as a crypto-friendly company through its initial funding of Elementus. Last October, the company started a new division called Fidelity Digital Assets, designed to offer cryptocurrencies to its many institutional clients. Before this, Fidelity had primarily dabbled in stocks, bonds and other traditional investment tools and strategies, and its introduction of crypto-related services marked a massive swing in the arena of Wall Street players.
The post Elementus Garners Nearly $4 Million From Crypto-Friendly Fidelity appeared first on Live Bitcoin News.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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