By Alicia Maher
The new product from Mastercard lets banks detect and prevent crypto fraud on its network. Named “Crypto Secure,” the product is an effort at risk management for financial institutions.
The New Tool in the Box
Crypto Secure employs the combined features of blockchain reports and artificial intelligence. It also uses public information on cryptocurrency transactions, as well as other sources. It will be effective in determining risks that might be connected with crypto exchanges.
Note that Mastercard has an existing structure like that for fiat currencies. It is available at banks across the globe.
The company’s head of cyber and intelligence, Ajay Bhalla, talked about the latest development. He said it will help Mastercard’s partners maintain compliance with authorities in their various localities. They will, thus, efficiently fight fraud within the crypto sector.
Bhalla said that the basic thought is that Mastercard wants to provide improved trust. It already provides this for commercial transactions. The same will now be available to asset transactions carried out by individuals and businesses.
Mastercard issuers using the Crypto Secure system have a specialized way of identifying risk rates. It is through a colored code that will represent the risk level of suspicious activities. Banks and crypto exchanges within the network have access to this feature.
Intensifying Global Efforts
The Crypto Secure system is maintained by CipherTrace. It is a startup company that develops security for blockchain operations. Based in California, it was acquired by Mastercard in 2021.
The tool does not make decisions for banks. It rather provides gives a certain level of advice on cryptocurrency transactions. As it is, Mastercard has up to 2,400 cryptocurrency exchanges under its network.
Cryptocurrency payments are getting popular in finance, thanks to payment facilitators like Mastercard and Visa. Visa recorded $1 billion worth of crypto expenditure in 2021. Mastercard has just launched a new cryptocurrency payment option in a place like Argentina.
But while cryptocurrency grows in the public domain, so are fraud and other crypto-related crimes. Reports from Chainalysis state that 2021 saw a new height in crypto crime rates. Fraudulent crypto wallets were said to have received up to $14 billion.
So far this year, investors in Australia have lost about $242 million to crypto fraud. Some business executives have also connected crypto with Ponzi schemes. Some of them have signaled social media companies to watch crypto frauds in their networks.