SNEAK PEEK
- A new piece of software from Mastercard will be unveiled on Tuesday to assist banks in identifying and blocking transactions from fraudulent cryptocurrency exchanges.
- The service is powered by CipherTrace, a blockchain security startup that Mastercard acquired last year.
- Mastercard is introducing the solution in response to an uptick in criminal activity in the developing digital asset sector.
According to a CNBC story, payments giant Mastercard is introducing Crypto Secure today. This new software application is intended to assist banks and other card issuers in identifying and blocking fraudulent transactions via cryptocurrency exchanges.
For Mastercard’s currency transactions, a comparable mechanism already exists; the technology is currently being extended to Bitcoin and other significant cryptocurrencies.
The tool assesses the risk of criminality linked with cryptocurrency exchanges connected to the payments network using “advanced” artificial intelligence algorithms and data from public blockchains. It is powered by CipherTrace, the crypto detective business Mastercard purchased last year.
CipherTrace, a blockchain security startup that Mastercard purchased last year, powers the service. CipherTrace, a Menlo Park, California-based company, assists organizations and authorities in looking into unauthorized cryptocurrency transactions. Its primary competitors are the New York-based Chainalysis and the London-based Elliptic.
The solution is being introduced by Mastercard against the backdrop of an increase in criminality in the emerging digital asset market. According to statistics from blockchain analytics company Chainalysis, the amount of cryptocurrency entering wallets with known criminal connections increased to a record $14 billion last year. The year 2022 has also seen a wave of high-profile cyber attacks and con games that target cryptocurrency investors.
Banks and other card issuers are presented with a dashboard on the Crypto Secure platform that has color-coded ratings for the likelihood of suspicious behavior, with red denoting “high” risk and green denoting “low.”
Crypto Secure does not decide whether to reject a certain crypto merchant. It is up to the card issuers to make that choice.
Although the falling values of Bitcoin and other prominent cryptocurrencies may be to blame for the reduction in illicit cryptocurrency activities, Mastercard’s broader digital asset strategy hasn’t been affected by the protracted bear market.
Visa recorded over $1 billion in cryptocurrency spending last year, and Mastercard just introduced additional cryptocurrency payment options in places like Argentina and Indonesia.
