Elementus, offering a service to locate illicit transactions involving digital currency, has raised ~$4 million from Fidelity Investments, a company that has grown fond of the crypto space this past year.
Led by Morgan Creek Digital, the funding round also saw Avon Ventures, Devonshire Investors, Stage 1 Ventures and Robot Ventures make significant investments in the company.
The immutable record keeping of Blockchain transactions has often been overlooked by sensationalist headlines claiming cryptocurrency is a haven of illicit activity, such as money laundering, tax evasion, purchases of drug paraphernalia, guns or other illegal goods through black markets. The fact is that cash is a fare better tool for criminals to engage in illicit transactions.
Elementus offers to comb the transaction records of blockchains to locate the source of funds in transactions in order to determine how the money is being used. On most occasions, it will likely be crypto exchanges seeking tools such as Elementus as part of AML/KYC compliance. These kinds of tools also offer law enforcement guidance in investigating allegations of criminal activities.
It is also interesting to remember that last October, Fidelity Investments started a new division called Fidelity Digital Assets, which were primarily designed to offer cryptocurrencies to institutional clients.