The goal of the partnership is to “bring further confidence and safety to the Stellar network.” Elliptic will provide monitoring, compliance, and analysis software on the XLM blockchain.
Denelle Dixon, CEO and executive director of the Stellar Development Foundation, said in the announcement:
“Combining their [Stellar’s] services with the built-in compliance functionality of the Stellar network, we are empowering crypto businesses and financial institutions with stronger tools to manage risk and operate with transparency and accountability.”
According to the announcement, the technology from Elliptic will provide members of the XLM network the ability to track the transactions on its system.
The network may consist of organizations such as financial institutions, businesses, and regulators.
The announcement noted that the tools they will be providing will enable institutions to identify illegal transactions as they happen within the network — all with the aim of helping address money laundering, sanctions evasion, and terrorist financing.
Such developments would help them in terms of better compliance with Know-Your-Client (KYC) and Anti-Money Laundering (AML) regulations.
Simone Maini, chief executive officer of Elliptic said:
“As regulations mature, it will become increasingly important for crypto-asset issuers and platform developers to enable their users to stay compliant if adoption is to grow. The Stellar Development Foundation has been ahead of the curve in working with Elliptic on this.”
Elliptic is also a partner of Binance, Zilliqa, and Wells Fargo.
According to the announcement, Elliptic has already been working with Stellar for several months. They have already been at work with the infrastructure and preparations for integration with Stellar.
The next step for Elliptic analysts is to study transactions that happen inside the dark web, money laundering patterns, and data collection for XLM accounts that are linked to known entities.
Some are not comfortable with a third party having a peek at the transactions going on in the network. After all, the cryptocurrency industry has been touted by many as a way to perform transactions privately.
This makes the partnership between Stellar and Elliptic a tough balancing act between protecting user privacy while disincentivizing illicit transactions.
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