Mastercard debuts crypto anti-fraud tool

Thursday 6 October 2022 11:56 CET | News

Mastercard has debuted a new piece of software called Crypto Secure, that helps banks identify and cut off transactions from fraud-prone crypto exchanges.


The system uses artificial intelligence algorithms to determine the risk of crime associated with crypto exchanges on the Mastercard payment network. It relies on data from the blockchain, a public record of crypto transactions, as well as other sources.

The service is powered by CipherTrace, a blockchain security startup Mastercard acquired last year. Based in the US, CipherTrace helps businesses and government agencies investigate illicit transactions involving cryptocurrencies. The company rivals Chainalysis and Elliptic, which is based in the UK.

Crypto criminality is on the rise

Mastercard is launching the service against a backdrop of growing crime in the nascent digital asset market. The amount of crypto entering wallets with known criminal connections surged to a record USD 14 billion in 2021 , according to data from blockchain analytics firm Chainalysis. And 2022 has seen a spate of high-profile hacks and scams targeting crypto investors.

Mastercard has debuted a new piece of software called Crypto Secure, that helps banks identify and cut off transactions from fraud-prone crypto exchanges.


On the Crypto Secure platform, banks and other card issuers are shown a dashboard with color-coded ratings representing the risk of suspicious activity, with severity of risk ranging from red for high to green for low. Crypto Secure doesn’t make a judgment call on whether to turn away a specific crypto merchant. That decision is down to the card issuers themselves.

Mastercard representatives said that the kind of trust they can provide for digital commerce transactions, they want to be able to provide to digital asset transactions for consumers, banks, and merchants.

The launch comes at a specific time

Mastercard already uses similar technology to prevent fraud in fiat currency transactions. With Crypto Secure, it’s expanding such functionality to Bitcoin and other virtual currencies. Ajay Bhalla, Mastercard’s president of cyber and intelligence business, said the move was about ensuring its partners can stay compliant with the regulatory landscape.

Compliance has become an important focus in crypto lately as more banks and payment companies enter the fray with their own services for trading and storing digital assets. In September 2022 Nasdaq signalled its first major push into crypto , launching custody services for institutional clients.

Meanwhile, governments on either side of the Atlantic are looking to implement fresh curbs on the crypto sector, which so far been mostly lacking in regulation. The Biden administration has released its first-ever framework on regulation of the crypto industry in the US , while the European Union has approved landmark crypto laws of its own.

Mastercard is doubling down on crypto at a time when prices of digital currencies are falling, and volumes have dried up. The entire market has shed roughly USD 2 trillion in value since the peak of a huge rally in November 2021.

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Keywords: cryptocurrency, fraud management, fraud detection, cybersecurity, cybercrime
Categories: DeFi & Crypto & Web3
Companies: Mastercard
Countries: World
This article is part of category

DeFi & Crypto & Web3


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