Mastercard Unveils A Crypto Anti-Fraud Tool to Combat Fraud Transactions
A number of card issuers in the market have been offering crypto-enabled credit cards in the market. On Tuesday, October 4, payments giant Mastercard announced the launch of Crypto Secure, a software which will help banks identify as well as cut-off transactions from fraud-prone exchanges.
The system leverages sophisticated artificial intelligence algorithms to determine the risk of crime associated with crypto exchanges. The system also relies on data from blockchain which maintains a public record of crypto transactions along with other sources.
Blockchain security startup cipherTrace, acquired by Mastercard last year, will be powering up this service. The California-based startup helps businesses and government agencies investigate illicit transactions involving cryptocurrencies.
Mastercard said that it is launching this service against the backdrop of increasing number of crimes in the crypto space. Last year, the amount of crypto entering wallets linked to criminal connections surged to a record $14 billion. This year in 2022, there have been several high-profile scams and hacks targeting crypto investors.
The CryptoSecure platform features a dashboard for banks and other credit card issuers. It features color-coded ratings that represent the risk of suspicious activity. The green color code shows “low” severity of risk while the “red” collar code shows a high severity of risk.
Note that the role of CryptoSecure is to just highlight any potential threats in crypto transactions. It won’t take any judgment call on whether to turn away any specific merchant. This decision will be to the discretion of card issuers themselves.
Microsoft said that it is already using the same technology for preventing fraud in fiat currency transactions. The CryptoSecure software will help to expand this functionality to Bitcoin and other digital assets. Ajay Bhalla, Mastercard’s president of cyber and intelligence business, said that this will help its partners stay compliant with complex regulatory landscape.
During his interview with CNBC, Bhalla added: “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.”
With the growing penetration of crypto in mainstream financial systems, compliance is become an area of key focus. Also, many traditional players have joined the crypto bandwagon by offering different services for the market.