Published - October 6, 2022 @ 2:36 PM (EET)
Mastercard (NYSE:MA), on Tuesday, launched a new piece of software that helps banks identify and cut off crypto exchanges prone to fraudulent transactions.
"Crypto secure," the payments giant's latest push into the crypto space, allows card issuers to assess the regulatory risk associated with crypto exchanges on the Mastercard payment network.
The system, which uses sophisticated artificial intelligence algorithms, relies on blockchain data and other sources that allow banks to see where cardholders are buying crypto and assess their overall exposure to the digital asset space.
Ajay Bhalla, the president of Mastercard's cyber intelligence business, said,
"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."
Based in Menlo Park, California, the service is powered by a blockchain security startup, CipherTrace, which Mastercard acquired last year.
Within its network, Mastercard currently has around 2,400 crypto exchanges.
Thanks to centralized payment processors, like Mastercard and Visa, crypto payments are becoming more mainstream.
But, as crypto continues to enter the public eye so does any fraud and crime related to the industry and despite the recent declines in crypto prices, illegal activity has shown no signs of slowing down.
In addition, while some trading platforms that offer cryptos, like Robinhood (NASDAQ:HOOD) and Coinbase Global (NASDAQ:COIN), are regulated in the US, much of the global crypto trading volume takes place on offshore and unregulated exchanges.
Chain analysis data showed that 2021 marked a new all-time high in crypto crime, with fraudulent wallet addresses receiving $14 billion.
On Tuesday, Mastercard finished the day 3.7% higher and is currently trading at $301.27.
The company was largely riding on the momentum of another solid day for stocks as the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were all up more than 100 points at 2.8%, 3.1%, and 3.3%, respectively.
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