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This year we celebrate the 10-year anniversary of Elliptic.
With the crypto asset industry completely transformed over the past decade, we sat down with Elliptic co-founder James Smith to learn more about our journey so far.
How did you first get involved in cryptocurrencies?
In 2011, my friend and co-founder Tom Robinson told me about Bitcoin, and told me he was trading it and I should take a look, and I completely ignored him. And just in early 2013, when I was working as an options trader, I was sitting on the trading floor and I saw on CNBC that the price of Bitcoin went from about $10 to $30 in a few months, maybe a few weeks.
I suddenly became interested again, so I called Tom, and at that moment I became fascinated and fell down the rabbit hole. I tried to understand what it was, why it was important, why it was different. And that was really the beginning of our journey in building a joint business. Not long after that we founded Elliptic.
We’re celebrating the 10th anniversary of Elliptic. how does it feel
Ten years?! First, I feel really proud. It’s amazing to see what we’ve built as a team here in 10 years. Ten years ago, the industry was so different than it is today, and Elliptic only had three people. We are now responsible for educating much of the world – regulators, companies, banks, start-ups – about how you can safely participate in cryptogram. We’ve worked with the world’s leading exchanges to set and promote cryptocurrency compliance standards. We have worked with law enforcement on some of the biggest cases in the world. What I feel is really proud of what we have achieved.
Tell us how Elliptic first got started.
So, as I mentioned earlier, in early 2013 I was working as a derivatives trader and on the trading floor I saw on CNBC that the price of Bitcoin went from $10 to $30. I called my friend Tom who told me about cryptocurrencies earlier in 2011. I asked him, “What is this Bitcoin?” I started learning about it, and I tried to buy some. I had to buy some from the guy on the forum, I bought some from Tom. It was awkward. It was so hard to get any, and so hard to use. But it felt fundamentally important. It felt like a new construction, a new kind of money.
We had a really strong belief that this was going to be important to the way the world moves value. And so we quit our jobs and started trying to figure out what infrastructure to build. We realized that if this was going to be part of the financial system, then there had to be a much better infrastructure.
So we looked at whether to build an exchange, we actually launched a custodial product early on, we met other people who were building businesses back in 2013 and we quickly realized that the problem that many exchanges face is answering questions from the Anti-Financial Intelligence Network (FinCEN) about where the money is coming from, whether it’s just Silk Road drug dealers trying to launder their money or legitimate users.
We saw this as a data problem and quickly hacked the first version of our product. We showed it to a few exchanges, they liked it and usage started to grow. And that was the beginning of our journey.
How much and in what way has the cryptoasset space changed since you founded Elliptic 10 years ago?
The crypto asset space has completely changed in the last 10 years. First, 10 years ago it was just Bitcoin, there were no crypto assets. And now we have this massive proliferation of blockchains and assets and companies and use cases, it’s incredible. Secondly, the first meeting I went to 10 years ago was in the back of a pub in London near Paddington station, there were about 20 people. And at the last conference I went to a few weeks ago, there were 15 or 16,000 people.
The third thing I would say is that when we started this business, we were trying to convince a few other start-ups in the area that they should take compliance seriously. Now every financial institution is thinking about how to tackle cryptocurrency. So I think it’s amazing to see how much we’ve changed in the last 10 years, and I’m really excited to see what the next 10 will bring.
Why are Elliptic’s tools best equipped to combat financial crime in the cryptoasset space?
Since we first started building products to help stock exchange compliance teams 10 years ago, we’ve always thought about size. We thought about those companies that are growing and will be the financial institutions of tomorrow. We thought about how many transactions, wallets, people and users would need to be reviewed and reconciled. And so, we built all our products to scale.
We tried to think about how we can be a partner with the companies and institutions we work with. If you compare where we are today as an industry to 10 years ago, the scale is huge – whether it’s the number of transactions and wallets, whether it’s the amount of crime or the amount of economic activity, all of those things have grown tremendously and we expect if it continues.
What is the thing in the crypto space that surprises you the most?
When you spend 10 years in crypto, you become immune to surprises [laughs]. Crypto is never boring, there is always a breakout story, and this applies equally in a bull market as a bear market. I think that’s part of what I love about him; keeps you on your toes. I think that also tells me that we have a lot of work to do. And that’s what’s exciting to me; this is still just the beginning.
What is your favorite thing about the work culture at Elliptic?
I’m really lucky to work with some amazing people, and what I love about the people I work with at Elliptic is that they all want to understand how they can understand the customer’s problem and solve it. That’s my favorite thing – to go and listen, roll up my sleeves and come up with solutions that actually solve a problem.
If you weren’t the co-founder of a blockchain analytics company, what would you be?
I would probably have to be the founder of some other crypto business. If I wasn’t the founder of a crypto business, I’d probably be the founder of some other data business. And if I couldn’t do any of that, then I would try to be a musician, but unfortunately my enthusiasm far outweighs my talent, so I think it’s best to stick to cryptocurrencies!
How we can help
Elliptic tracks 98% of all cryptoasset trading volume, and we’ve collected over 100 billion data points – preventing rogue nation states and cybercriminals from using cryptoassets to hide their ill-gotten gains. We also boast the widest coverage of digital assets and blockchain available on the market.
Our verification, due diligence and investigative solutions mean compliance teams and investigators can track and visualize the proceeds of crime across blocks and assets in real-time – helping you achieve the highest levels of risk detection.
Contact us to find out more.
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