Mastercard’s new product, Crypto Secure, helps banks detect and prevent fraud on cryptocurrency merchant platforms. The service provider Mastercard launched its new crypto security service on Oct. 3 in order to protect banks against risks associated with cryptocurrencies.
Crypto Secure uses artificial intelligence, blockchain data, and public records of crypto transactions to assess crime-related risks of crypto exchanges within the Mastercard network. This is similar to a fiat currency service that Mastercard offers banks.
Banks and other Mastercard card issuers will see color-coded risk ratings of crypto merchants when they use Crypto Secure. These ratings represent the risk of suspicious or fraudulent activity connected to said merchant. Crypto Secure is run by CipherTrace, a California-based startup for blockchain security that was acquired by Mastercard the previous year.
The tool doesn’t make decisions for banks, but it does provide another level of safety on cryptocurrency transactions. Mastercard has around 2,400 crypto exchanges within its network currently. As more people begin using cryptocurrencies as payments, mainstream companies like Visa and Mastercard are helping to legitimize the new form of currency.
Although last year Visa reported that crypto spending reached over $1 billion, and Mastercard has recently created new crypto payment options in countries such as Argentina and Indonesia, fraud and crime related to the industry are also on the rise. According to Chainalysis data, 2021 marked a new all-time high in crypto crime with fraudulent wallet addresses receiving $14 billion.
Aussie investors lost a whopping $242 million to crypto and investment scams in just 2022. Some business officials have called cryptocurrencies a Ponzi scheme, while others are pleading with social media sites to be more vigilant against cryptocurrency scammers’ misuse of these platforms.