Mastercard Launches New Tool to Combat Crypto Fraud

New software called Crypto Secure allows banks to assess the risk of criminal activity on their network.
CipherTrace is the blockchain security company associated with Mastercard that provides this service to financial companies.
Mastercard’s service is launching at a time when cryptocurrency crimes, including exploits and scams, are on the rise.

Mastercard has just launched a new tool that will help banks identify and block fraudulent transactions from exchanges, the credit card company reported, according to a CNBC post.

Using artificial intelligence, Crypto Secure blockchain data-driven software detects fraud and determines the risk level of certain crimes associated with cryptocurrency platforms, via the Mastercard payment network.

The company in charge of providing this service is CipherTrace. The American blockchain security firm, which competes with others in the sector such as Chainalysis and Elliptic, was acquired by Mastercard last year.

Some of the services the California-based startup provides are crypto risk advisory, fraud detection, and due diligence. CipherTrace’s main clients are companies in the financial sector and government agencies. The firm helps them investigate illicit transactions related to cryptocurrencies.

Growth of Cybercrime

This year, thefts, fraud, and money laundering with cryptocurrencies and other digital assets have grown exponentially. Criminal activity associated with cryptocurrencies reached $14 billion, according to figures from Chainalysis.

A report from the security firm indicates that in the first seven months of 2022, hacks (exploits) to cryptocurrency platforms reached $1.9 billion and crypto investor scams reached $1.6 billion. These figures will probably increase at the end of the year.

The Crypto Secure service provides banks and card issuers with a dashboard that graphically displays the risk of suspicious activity. The risk classification goes from the highest level (red) to the lowest (green).

However, the decision regarding whether or not to reject the operations of a certain user on the network rests with the client (bank or card issuer) and not with Crypto Secure, which limits itself to exposing the risks.

“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,” says Mastercard's president of cyber ????and intelligence solutions, Ajay Bhallah.

On the Flipside

This technology has already been tested by Mastercard in fiat money transactions to prevent fraud.
The Crypto Secure solution is now being extended to Bitcoin and other cryptocurrencies that are traded through exchanges.

Why You Should Care

As crypto crime has been on the rise, companies in the traditional financial sector and DeFi have had to fork out more money on security and consulting services.

Companies seek to substantially reduce the risk of exploits and Ponzi schemes for their customers. But, it’s also important to reduce the risk that the money that circulates through the crypto platforms does not come from international organized crime activities. This way they avoid incurring failures of regulatory non-compliance.

Below you can read other articles related to this topic:

Electoral Court Vetoes Candidacy of the ‘Bitcoin Pharaoh’ for Deputy in Brazil

South Korea Identifies Over $1 Billion Worth of Fraudulent Crypto-Related Transactions in 2022

Text source: DailyCoin.com

Cybersecurity