Many in the financial community believe the blockchain technology that supports it could have wider applications, revolutionising everything from stock market trades to property transactions, and the Bank of England is itself investigating the potential of cryptocurrencies. However, lenders have tended to avoid it because the technology’s anonymity makes it difficult to comply with rules that require them to root out suspicious behaviour and know the customers they are dealing with. Dr James Smith, one of Elliptic’s three co-founders, said its software, which uses artificial intelligence to scan the Bitcoin network, makes it easier to identify patterns of suspicious behaviour and trace it back to the source. It is already widely used by online exchanges and law enforcement to detect potential money laundering, and has processed around $2bn in Bitcoin transactions.
London-based Elliptic, a Bitcoin surveillance start-up that uses AI to scan the cryptocurrency network and detect potential money laundering, has raised $5m (around $2bn) from private equity group Paladin Capital, Santander and venture capitalists Octopus Ventures. Called a "game-changer for blockchain," the company has already processed £3.5m in transactions and plans to sell its software to large banks and expand in the US.