Mastercard Rolls Out New Crypto Fraud Protection Tool
Mastercard, a global payment innovator and technology company, has announced the launch of ‘Crypto Secure,’ a tool designed to assist banks in identifying and blocking fraudulent transactions from crypto exchanges.
Crypto Secure’ is powered by CypherTrace, a California-based startup cryptocurrency intelligence and blockchain analytics firm acquired by Mastercard in early September that combines artificial intelligence, blockchain data, and public records of crypto transactions, among other sources, to determine crime-related risks of crypto exchanges within the Mastercard network.
“The system uses sophisticated artificial intelligence algorithms to determine the risk of crime associated with crypto exchanges on the Mastercard payment network,” according to a CNBC report.
The platform provides users with risk information via its dashboard, denoting high-risk transactions with red and low-risk transactions with green, giving card issuers the option to approve or reject the crypto merchant in question.
Banks can already use a similar service with fiat currency transactions provided by Mastercard.
Ajay Bhalla, Mastercard’s president of cyber and intelligence business, stated that this development helps its partners stay compliant with local regulations when combating crypto fraud:
“The idea is that we want to be able to provide the same level of trust for digital asset transactions for consumers, banks, and merchants that we do for digital commerce transactions.”
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.
While the tool doesn’t make judgments 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 common as a result of centralized payment processors such as Visa and Mastercard. Visa reported over $1 billion in crypto spending last year, and Mastercard has recently launched new crypto payment options in Argentina and Indonesia.
However, as cryptocurrency continues to gain popularity, so does any fraud or crime associated with the industry. According to Chainalysis data, fraudulent wallet addresses received $14 billion in 2021, setting a new all-time high in crypto crime.
In Australia, investors lost $242 million in 2022 due to investment and cryptocurrency-related scams. While some executives have recently linked cryptocurrency to a Ponzi scheme, others are warning social media behemoths about crypto scams linked to their platforms.