Mastercard’s new product allows banks to find and prevent fraud on crypto merchant platforms within its network.
The financial service provider Mastercard will launch a new crypto service related to risk management on Tuesday Oct. 3. Mastercard’s new service, Crypto Secure, is aimed to help banks find and prevent fraud on crypto merchant platforms.
Crypto Secure combines the usage of artificial intelligence, blockchain data and public records of crypto transactions, along with other sources, to determine crime-related risks of crypto exchanges within the Mastercard network.
Mastercard already has a similar service with fiat currency transactions available to banks.
The president of cyber and intelligence business for Mastercard, Ajay Bhalla, said this development helps its partners stay compliant with local regulations when fighting fraud in the crypto space:
“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.”
Banks and other Mastercard card issuers that use Crypto Secure will see color-coded risk ratings of crypto merchants which represent the risk of suspicious or fraudulent activity connected to said merchant.
Crypto Secure is run by CipherTrace, a California-based startup for blockchain security that was acquired by Mastercard the previous year.
While the tool doesn’t make judgements for banks it provides another level of advisory on crypto transactions. Mastercard currently has around 2,400 crypto exchanges within its network.
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.
However, as crypto continues to enter the public eye so does any fraud and crime related to the industry. According to Chainalysis data, 2021 marked a new all time high of crypto crime with fraudulent wallet addresses receiving $14 billion.
In Australia in 2022 investors lost $242 million to investment and crypto-related scams. 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.