With the help of Mastercard’s new release, banks can detect and prevent fraud on their network’s cryptocurrency merchant platforms.
On October 3, the financial services company Mastercard introduced a brand-new crypto service that focuses on risk management. The goal of Mastercard’s new service, Crypto Secure, is to assist banks in identifying and preventing fraud on platforms used by crypto merchants.
To evaluate the crime-related risks of cryptocurrency exchanges operating within the Mastercard network, Crypto Secure combines the use of artificial intelligence with blockchain data, public records of cryptocurrency transactions, and other sources.
An equivalent service that supports fiat currency transactions has already been offered by Mastercard to banks.
Ajay Bhalla, president of Mastercard’s cyber and intelligence division, stated that this innovation aids its partners in maintaining local regulatory compliance when battling fraud in the cryptocurrency space:
“The notion is that we want to be able to provide the same type of trust to digital asset transactions for customers, banks, and merchants that we do for digital commerce transactions.”
When using Crypto Secure, banks and other Mastercard card issuers can view colour-coded risk assessments of crypto merchants, which indicate the likelihood that the merchant would engage in fraudulent or suspicious activities.
CipherTrace, a blockchain security startup located in California that was acquired by Mastercard last year, operates Crypto Secure.
The tool presents a high level of advice on cryptocurrency transactions even though it doesn’t render judgments for banks. Currently, Mastercard’s network comprises about 2,400 cryptocurrency exchanges.
Centralized payment processors like Visa and Mastercard have made crypto payments more widely accepted. Visa recorded over $1 billion in cryptocurrency spending last year, and Mastercard just introduced additional cryptocurrency payment options in places like Argentina and Indonesia.
The public’s awareness of cryptocurrency and related fraud and cybercrime is, however, growing. Data from Chainalysis shows that in 2021, cryptocurrency crime reached a new all-time high, with $14 billion being transferred to fraudulent wallet addresses.
Australian investors fell victim to investing and cryptocurrency-related scams in 2022, losing $242 million. While some industry leaders have lately compared cryptocurrency to a Ponzi scheme, others are warning social media behemoths about cryptocurrency scams related to their platforms.