Crypto Compliance Conversations Part 2: Elliptic – Blockchain Compliance and Forensics

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This is part 2 of 2 articles regarding the Crypto Compliance Meetup I attended on March 5, 2020. Read part 1 here.

Any financial system is at risk to face compliance challenges. In an open system like crypto, that risk is even greater. This is probably the result of lesser oversight and scrutiny. However, the landscape has been changing when it comes to crypto regulations. Governments and international financial bodies are increasingly becoming pro-active in dealing with the industry. With that, “compliance” has become necessary if a crypto company ever wants to survive today.

This is the key lesson I have learned during the Crypto Compliance Conversations Meetup I attended last March 5th upon invitation of consulting firm Emfarsis. The first speaker on that meetup is Commissioner Kelvin Lee of the Securities and Exchange Commission (SEC) who talked about what the Commission has been doing when it comes to fintech. Key Lesson from his talk: The SEC can come after you if you do not comply. If you are a crypto company, you must dedicate some resources to compliance. Companies like Elliptic, the sponsor of the meetup, has been helping crypto companies around the world regarding compliance with local and international standards and laws. Here are some important points that Elliptic COO Simone Maini discussed during the meetup. (By the way, Ms. Maini joined the meetup remotely.)


In 2015, Elliptic published the Bitcoin Big Bang, a summary of the entire six-year history of all Bitcoin transactions. From their visual sets, one can track how large websites of those times, like how the infamous Silk Road and the embattled Mt. Gox were once key places where bitcoin transactions originated or went to. Elliptic provides the tools that allow a crypto company to determine whether a crypto payment is a proceed from crime. This helps businesses prevent money laundering. This is particularly important globally and in the local setting, where the Philippines have already signed the Anti-Money Laundering law in 2001 and the Terrorism Financing Prevention and Suppression Act in 2012. In 2019, the international body Financial Action Task Force recommended countries to increasingly apply AML to virtual asset service providers (VASPs).


However, criminal activity continues to this day. Ms. Maini said criminals earn billions of dollars in crypto each year, and without proper compliance measures, any crypto company can become an unwilling victim, or should I say, host to such transactions. In many countries, non-compliance will normally result in fines or even lost of banking relationships, as well as reputational damage. Elliptic wants to work with crypto companies to overcome the challenge of regulation. They have been doing this since 2013. It was also in that year when Elliptic collaborated with firms like Coinbase, BitStamp, Circle, and Gemini to build the first crypto AML solution. Over the years, Ms. Maini said that they have developed a lot of expertise and insights into what’s actually needed for an AML solution, along with products and services that can all be tailored to each client.

For example, last week, the company launched Elliptic Lens, which can instantly screen wallets to identify immediately who you’re doing businesses with before a transaction can be approved. Therefore, a high-risk transaction can be blocked before it ever happens.


During the meetup, Ms. Maini emphasized the key pillars that Elliptic abides by. The first is Accuracy. Elliptic has a team of crypto intelligence analysts who deep dive into the web to find out what and where crypto is being used. In that way, Elliptic’s data set can grow, which can then be used to track and monitor illicit activities and make sure such activities are not happening on your platform. Ms. Maini noted when the US Treasury recently added 20 more Bitcoin addresses in their sanctions list, Elliptic added those data set within 3 hours, making sure their clients would not be at risk of sending and receiving funds from to and from those addresses.

The next one is Efficiency, which is highlighted by automation. Last is trust, extremely important in this industry. The company’s platform covers majority of crypto assets and blockchains, making sure that their clients can screen almost every illicit activity that might happen.

Elliptic has been in the industry since 2013, which Ms. Maini admits is a long time in crypto. The company has 2 high profile clients in the Philippines – and PDAX, both are licensed crypto exchanges.

With the FATF Travel Rule and existing and upcoming regulations from the country’s Securities and Exchange Commission, there’s no way any crypto company can operate without complying. They can move to another country where compliance can be a bit lax, but anywhere a business goes, it will have to comply. Analytics and blockchain forensic firms like Elliptic are experts in this field and I think businesses will need to dedicate resources to compliance sooner rather than later.

This is part 2 of 2 articles regarding the Crypto Compliance Meetup I attended on March 5, 2020: [Recap] Crypto Compliance Conversations Part 2: Elliptic – Blockchain Compliance and Forensics

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