Payments giant Mastercard announces the launch of “Crypto Secure,” a software that aids banks in identifying and blocking transactions from crypto exchanges prone to fraud.
According to a CNBC report, “the system uses sophisticated artificial intelligence algorithms to determine the risk of crime associated with crypto exchanges on the Mastercard payment network.”
The Crypto Secure service is powered by CipherTrace, a blockchain security startup that Mastercard purchased last year. The California-based company assists organizations and authorities in looking into unauthorized cryptocurrency transactions.
Banks and other card issuers are presented with a dashboard on the Crypto Secure platform that has color-coded ratings for the probability of suspicious behavior, with red denoting “high” risk and green indicating “low” risk.
Crypto Secure does not decide whether to reject a particular crypto merchant. It is up to the card issuers to make that choice.
Similar technology is already used by Mastercard to stop fraud in transactions using fiat money. It is extending this functionality to bitcoin and other virtual currencies via Crypto Secure.
The move, according to Ajay Bhalla, president of Cyber and Intelligence Business at Mastercard, is intended to help its partners remain compliant with the complicated regulatory landscape.
Bhalla noted “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.”
Just last month, CipherTrace’s rival Chainalysis reported that the number of crypto hacks increased compared to the number of crypto scams since last year. However, the introduction of innovative software tools has made it simpler to find the stolen funds of cryptocurrency fraudsters.
