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Payments giant Mastercard today is launching Crypto Secure, a new software product designed to help banks and other card issuers identify and block suspicious transactions from crypto exchanges, according to a CNBC report.
A similar system is already in place for Mastercard’s fiat transactions, with the technology now expanding to Bitcoin and other major cryptocurrencies.
Powered by CipherTrace, the crypto sleuth company Mastercard acquired last year, the tool uses “sophisticated” artificial intelligence algorithms and data from public blockchains to determine the risk of crime associated with crypto exchanges connected to the payments network.
The platform offers a dashboard with color-coded ratings representing the risk of suspicious activity, with the severity of risk ranging from red for “high” to green for “low,” per the report.
Crypto Secure itself, however, doesn’t make decisions on whether a specific crypto merchant should be restricted—the final judgment is down to the card issuers.
“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,” Mastercard’s president of cyber and intelligence business Ajay Bhalla told CNBC.
According to Bhalla, Crypto Secure will ensure Mastercard’s partners can “stay compliant with the complex regulatory landscape.”
While illicit activity involving cryptocurrency is down 15% in volume so far this year, total scam revenue for 2022—despite being 65% lower compared to the end of July 2021—is still sitting at a whopping $1.6 billion, according to a recent report from Chainalysis.
Moreover, as of July 2022, $1.9 billion in crypto was still stolen in various hacking incidents, per the report.
While the decline in illicit crypto activity may be due to the slumping prices of Bitcoin and other major cryptocurrencies, the ongoing bear market hasn’t impacted Mastercard’s general digital asset strategy.
According to Bhalla, the company is “focused on providing solutions to the stakeholders for the long term.”
“These are market cycles, they will come, and they will go,” Bhalla told CNBC. “I think you’ve got to take the longer view that this is a big marketplace now and evolving and is probably going to be much, much bigger in the future.”
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