Mastercard introduces Crypto Secure to fight fraud for banks and credit cards
Credit card and finance company Mastercard Inc. today introduced a new system that will enable banks and card issuers to identify and stop crypto-asset transactions that could put their customers at risk of fraud.
According to a report exclusively shared with CNBC, the new service is called Crypto Secure and will use artificial intelligence and blockchain data powered by CipherTrace Inc., a crypto monitoring firm acquired by Mastercard in September 2021.
Using Crypto Secure, banks and card issuers will be able to see incoming transactions with color-coded ratings and representations of potentially dangerous activity. The risk of fraud on a given crypto exchange is shown with a number and a color code with a spectrum from green for “safe” to red for “dangerous”.
The platform itself does not take measures against transactions. Instead, it is up to card issuers and banks themselves to decide whether to refuse or accept.
According to a report by blockchain analytics firm Chainalysis, through July 2022, $1.9 billion in cryptocurrency has been through hacks compared to just under $1.2 billion in the same period in 2021. The same report concluded that this trend would not change immediately.
“The whole digital asset market is now a pretty big, significant market,” Ajay Bhalla, Mastercard’s president of cyber and intelligence operations. “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 for digital asset transactions for consumers, banks and merchants.”
According to Bhalla, the platform will also provide a way for Mastercard’s partners to remain compliant as crypto regulations begin to tighten globally.
Compliance has become an important focus for many banks and other services that work with cryptoassets as governments around the world have begun paying increased attention to the industry. Examples include a report by the Financial Stability Oversight Council released today that calls on Congress to pass more laws strengthening regulation of cryptocurrency assets and officials in the European Union, which sets out a new regulatory proposal to tame the “Wild West” of crypto markets by target fraud, money laundering and other criminal activities.
Mastercard said it already offers a similar service for traditional financial transactions, and this new service extends them to crypto assets such as bitcoin and Ethereum.
