Mastercard Deploys A New Anti-Fraud Tool In A Deeper Push Into Crypto

Mastercard is launching a new software tool aimed at helping banks “identify and cut transactions” from crypto exchanges prone to fraud. According to a report by CNBC, the software, which is known as “Crypto Secure”, will use utilize “sophisticated” artificial intelligence in scanning data from public records on crypto transactions. This will enable it to detect and gauge the risk of transactions between exchanges and banks, essentially helping banks prevent potential fraud.

The service will be powered by Cipher Trace, a California-based security startup acquired by Mastercard last year. The startup investigates illicit transactions involving cryptocurrencies and competes with market leaders in the crypto security sector, such as Chainalysis and Elliptic. Although the platform does not make a judgement on whether to block a specific crypto merchant, it helps banks flag suspected transactions by displaying colour-coded ratings on its dashboard-with the severity of risk ranging from red for “high” to green for “low”. 

“The whole digital asset market is now a pretty large, substantial market,” Ajay Bhalla, Mastercard’s President of Cyber and Intelligence, said ahead of the product launch. “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.” According to him, the move to launch the product was aimed at helping its partners “stay compliant with the complex regulatory landscape.”

This is the latest product launch by Mastercard even as it expands its tentacles into the fast-growing crypto sector and keeps pace with its main rival Visa- which has been making notable strides in the sector. The launch also comes on the heels of record-high crime levels in the nascent digital asset market. According to a report by blockchain analytics firm Chainalysis, crypto-related crimes raked as much as $14 billion last year. Despite the market slumping this year, crypto-related crimes are yet to abate, with a spate of high-profile hacks and scams leading to the loss of over $1.4B.

In response, regulators have been stepping up their guard to protect investors by introducing more compliance guardrails. Recently, the US Treasury sanctioned popular Ethereum-linked crypto mixer Tornado cash, with the US SEC cracking down on alleged crypto fraudulent projects. Last month, the Biden administration released its first-ever framework on regulation of the crypto industry, with the European Union leapfrogging the digital asset focussed MiCA regulation.

With institutional investors thronging into crypto, the sector has also been forced to improve its security features by deploying new software tools which help it trace and freeze ill-gotten crypto gains.

Source: Read Full Article