Payments giant MasterCard is launching a new risk management service that will help banks and card issuers prevent cryptocurrency-related fraud, CNBC reported on 4 October.
According to the publication, MasterCard’s Crypto Secure software will make use of artificial intelligence (AI) algorithms, on-chain data, and other sources to determine the crime-related risks of crypto exchanges within the MasterCard network, which currently number around 2,400. In addition to boosting security, the software will also help the company’s partners to stay compliant with local regulations when fighting crypto fraud. MasterCard’s president of cyber and intelligence business, Ajay Bhalla, said in a statement:
“The whole digital asset market is now a pretty large, substantial market. 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.”
The Crypto Secure service will be powered by CipherTrace — a blockchain security firm acquired by MasterCard last year — and will provide banks and card issuers with a color-coded dashboard that will display the risk ratings of crypto merchants on the network. The new system, however, is unable to make a judgement or take action, and is there to provide additional information on crypto transactions.
While crypto payments are becoming more popular — with Visa saying more than $1 billion was spent on crypto-linked Visa cards in the first half of 2021 — crypto-related crime has also grown significantly. Data from blockchain analysis firm Chainalysis shows that crime in the crypto space reached a new all-time high in 2021, with fraudulent wallet addresses receiving around $14 billion during the year.