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Unmasking Bitcoin Identities: The next level of thwarting illicit activity on the blockchain has arrived

LexisNexis® Risk Solutions cited as a Representative Vendor in the report


ATLANTA and LONDON – While the underlying Bitcoin technology, blockchain, has gone mainstream, the financial services industry is still hesitant to embrace the full promise of Bitcoin and confidently provide banking relationships to Bitcoin companies. The lack of financial transparency on Bitcoin entities continues to stymie the ubiquitous adoption of Bitcoin and other virtual currencies.

That reality, though, is soon to be short-lived. LexisNexis Risk Solutions, the global big data, technology and analytics firm, has teamed with Elliptic, a blockchain intelligence company, to remove that roadblock by exposing money launderers, human traffickers, terrorists, and drug dealers who use Bitcoin to make dark web purchases.

The alliance, which was announced today, integrates LexisNexis Risk Solutions robust anti-money laundering data into Elliptic’s Bitcoin transaction monitoring and compliance products. As a result, Elliptic clients can obtain more meaningful insights than ever before by automatically screening Bitcoin entities for links to sanctions, enforcements, politically exposed persons, adverse media and state owned companies.

“For the first time, Bitcoin companies can leverage bank-grade risk management practices to identify Bitcoin entities that appear on sanction and watch lists from around the world,” said Dr. James Smith, Elliptic CEO and co-founder. “Having this enriched data set built natively into Elliptic’s products takes Bitcoin AML and KYC controls to the next level.”

Elliptic will use LexisNexis® Bridger Insight® XG platform that includes its WorldCompliance™ database to identify whether Bitcoin transactions are linked to identities that are related to fraud, anti-money laundering, corruption or terrorist financing.

The amount of money laundering activity taking place with any currency, whether virtual or hard dollar, is difficult to calculate due to the complex structures bad actors put in place so that they can mask transactions. However, Elliptic revealed today that the largest dark marketplaces facilitate more than $250 million in annual sales. “The leading Bitcoin companies globally are already using Elliptic products to assess risk on more than $1 billion in Bitcoin transactions each month. By integrating LexisNexis Risk Solutions’ robust watchlist data, we are making it safe for a new wave of financial institutions to handle Bitcoin and bank Bitcoin companies,” said Dr. Smith.

According to Ray Valdes, a Gartner analyst who covers virtual currencies and blockchain technology, et al, the core Bitcoin technology stack has functioned with near-flawless operations over its lifetime, a track record that is unprecedented when compared to complex software from commercial vendors… However, the security track record of third-party software in the Bitcoin digital currency ecosystem is dismal… Many exchanges have been hacked — or funds have been stolen — due to a combination of unskilled programmers, poor methodologies and perhaps some criminal intent to defraud from the start. The situation is analogous, in the nondigital world, to a poorly run union or bank going bankrupt; such an event would not call into question the core mechanisms of a dollar-based economy.  Because of the near-flawless track record of the Bitcoin blockchain and core stack, developers of competing metacoin platforms and technology stacks will have significant work to prove their capabilities to support mission-critical contexts in this regard.1

In coming together, LexisNexis Risk Solutions and Elliptic represent a new global standard in Bitcoin risk management, AML Compliance and KYC Compliance.

  • LexisNexis Risk Solutions is the data, technology and analytics provider of choice for 100 of the top U.S. banks, helping them achieve regulatory compliance and mitigate business risk, like identity fraud, money laundering, terrorist financing, and tax evasion. The firm also works with 80 percent of U.S. federal agencies.
  • Elliptic provides Bitcoin transaction monitoring products to the largest U.S. and European Bitcoin exchanges and payment processors, and provides key evidence to law enforcement agencies in the U.S. and Europe for major investigations involving Bitcoin.

“This alliance demonstrates how data, technology and analytics can be used in innovative ways to foster financial transparency from China to Germany to the U.S.,” said Thomas C. Brown, SVP of U.S. Commercial Markets and Global Market Development at LexisNexis Risk Solutions. “More banks, Fintech startups, payments companies and eCommerce businesses can further consider the usefulness of the permissionless blockchain because as of today they are able to deploy best-of-breed money laundering screening against Bitcoin. As a result, the virtual currency potential evolves to a new level --  from possible conduit for money laundering to trusted technology along the economic value chain.”

About LexisNexis Risk Solutions

LexisNexis® Risk Solutions harnesses the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses across multiple industries and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit. For more information, please visit LexisNexis Risk Solutions and RELX.

About Elliptic
Elliptic is the global standard in blockchain monitoring technology, and is recognised as an established authority on blockchain compliance. In addition to providing data and analytics services to financial institutions and law enforcement agencies around the world, Elliptic advises governments on blockchain regulatory matters.

In 2015 the firm was awarded 'Security product of the Year ' by The Banker magazine and was a winner of the Swift Innotribe Start-up Challenge. In 2016, it was selected by KPMG as a “Top 10 Global Emerging Star” among Fintech startups.

1 Gartner, The Bitcoin Blockchain: The Magic and the Myths, April 8, 2016, Ray Valdes, David Furlonger, Fabio Chesini

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