Elliptic, a London-based blockchain intelligence company, has raised $5 million in Series A funding in a round led by Paladin Capital Group, which also received support from Santander InnoVentures, KRW Schindler, Digital Currency Group and Octopus Ventures.

Elliptic identifies illicit activity on the Bitcoin blockchain and provides its services to the leading Bitcoin companies and law enforcement agencies globally.

Dr James Smith, co-founder of Elliptic, told The Telegraph that its software, which uses artificial intelligence to scan the Bitcoin network, makes it easier to identify patterns of suspicious behaviour and trace it back to the source. It is being widely used by online exchanges and law enforcement to detect potential money laundering, and has processed nearly $2 billion in Bitcoin transactions.

Paladin Capital Group, that led the funding round, is a leading multi-stage private equity firm that provides funding to growing companies. The Telegraph noted that the firm has close connections with the US government. Kenneth Minihan, a former director of the US National Security Agency, is a managing director at Paladin.

“Elliptic is a game-changer for blockchain and is already trusted by some of the smartest minds in law enforcement and compliance. The firm’s monitoring capability will be an essential component of any blockchain in the future and we will help Elliptic to expand in the US, via our contacts and knowledge of US law enforcement and government agencies”, Minihan told The Telegraph.

Elliptic plans to use the funds to expand a recently-opened office in New York and target big banks that want to use the blockchain technology.