Payments giant Mastercard launches Crypto Secure, a new software product designed to help banks and other card issuers identify and block suspicious transactions from crypto exchanges. The service is powered by CipherTrace, a blockchain security startup acquired by Mastercard last year.
According to a CNBC report, Mastercard on Sept. 4 debuted a new piece of software that helps banks identify and cut off transactions from fraud-prone crypto exchanges.
As per the report, a similar system is already in place for Mastercard’s fiat transactions, with the technology now expanding to Bitcoin and other major cryptocurrencies.
Powered by CipherTrace, the crypto sleuth company Mastercard acquired in 2021, the tool uses “sophisticated” artificial intelligence algorithms and data from public blockchains to determine the risk of crime associated with crypto exchanges connected to the payments network.
The platform offers a dashboard with color-coded ratings representing the risk of suspicious activity, with the severity of risk ranging from red for “high” to green for “low.”
However, Crypto Secure itself doesn’t make decisions on whether a specific crypto merchant should be restricted – the final judgment is down to the card issuers.
“The idea is that the kind of trust we provide for digital commerce transactions, we want to be able to provide the same kind of trust to digital asset transactions for consumers, banks, and merchants,” Ajay Bhalla, Mastercard’s president of cyber and intelligence business, said in the intrerview.
Per Bhalla, Crypto Secure will ensure Mastercard’s partners can “stay compliant with the complex regulatory landscape.”
Crypto payments are becoming more mainstream thanks to centralized payment processors like Visa and Mastercard. Last year Visa reported over $1 billion in crypto spending, while Mastercard has recently created new crypto payment options in countries such as Argentina and Indonesia.
Meanwhile, as crypto continues to enter the public eye so does any fraud and crime related to the industry. According to Chainalysis, 2021 marked a new all-time high in crypto crime with fraudulent wallet addresses receiving $14 billion.
In Australia, investors lost $242 million to investment and crypto-related scams this year. While some executives have recently related crypto to a Ponzi scheme, others are calling on social media giants to be aware of crypto scams linked to their platforms.