Mastercard to launch software to identify cryptocurrency fraud

Mastercard is set to launch a new tool called Crypto Secure that will allow banks to recognize fraudulent activity related to cryptocurrency exchanges on its payment network.

Crypto Secure was built by CipherTrace, a blockchain-related security startup acquired by Mastercard in 2021. It will use an AI algorithm to examine crypto fraud and illicit behavior from a transaction blockchain of crypto.

According to Ajay Bhalla, president of cyber and intelligence business at Mastercard, the company wants to extend the same kind of security and trust to the virtual asset space as in the digital commerce transaction industry.

The newly launched software will allow banks to not only identify but also reverse transactions originating from vulnerable crypto exchanges. CipherTrace, which was a startup based in Menlo Park, Calif., before being acquired by Mastercard, enables companies and government agencies to examine the illegal transfer of money that involves cryptocurrencies. Its main competitors in this sector are Chainalysis and Elliptic.

Mastercard is introducing this service as criminal activity increases in the nascent phase of the virtual asset industry. Around USD 14 billion was illegally transferred through the wallets.

On Mastercard’s secure crypto platform, authorities are presented with a dashboard with ratings signifying the risk of illicit activity. While Mastercard already relies on similar technology to protect against fraud in currency exchanges, it will now be extended for use in transactions with bitcoin and other virtual assets.

With this new software, it is now easy for authorities to hunt down crypto offenders and employ intelligent data science and machine learning algorithms to assess and identify exceptions in public blockchain data. Mastercard is also in competition with its competitor Visa, which itself has made significant investments in the cryptocurrency sector. In its first fiscal year of 2022, Visa claimed to enable $2.5 billion in money transfers from cards associated with an account on a cryptocurrency exchange. A year prior, Visa introduced its Crypto Advisory Procedure to provide suggestions to clients on topics such as deploying crypto features to analyze NFTs.

Meanwhile, governments around the world are looking for new regulations to impose restrictions on the crypto industry, which was not widespread until now. Recently, the Biden administration revealed its first policy framework on the regulation of crypto exchanges in the United States.

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Mastercard to launch software to identify cryptocurrency fraud


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