The international card company Mastercard is no newcomer to the world of cryptocurrencies. Through various collaborations with crypto companies, we can see that they are really interested in this innovative sector. At the same time, the infrastructure of payment cards and payment gateways creates an important bridge that helps the easier exchange of fiat currencies for cryptocurrencies.
Mastercard is currently focusing on this aspect and is bringing institutional clients a new product that should protect them from various cryptocurrency frauds. We must add that caution is really in order here, as you can still come across many scams in the cryptomarket.
Scams still big part of cryptocurrencies
This is a very unkind statement, but it is true. The cryptocurrency sector is chronically known because you cannot avoid various types of fraud in it. Some are already known by the whole community and thus practically only target newcomers. Others, on the contrary, come up with new techniques and manage to steal considerable amounts of funds from people. The statistics in this area are improving from year to year, but the numbers are still alarming.
Illegal activity involving cryptocurrencies has decreased by 15% this year, and fraud revenue for 2022 has decreased by a whopping 65% compared to last year. That sounds good, but a report from Chainalysis states that despite the drop, it’s still more than $1.6 billion in absolute numbers. Add to that the $1.9 billion that have been stolen since July 2022 alone in various hacking attacks.
According to data from Chainalysis, 2021 saw a new all-time high in crypto crime, with fraudulent wallet addresses taking up to $14 billion in total. As a result, we are still looking at a relatively dangerous market, where caution is definitely in order.
Crypto Secure – a new tool to combat fraud in the field of cryptocurrencies
Only yesterday, the payment giant Mastercard launched its new tool called Crypto Secure. It is intended for payment card issuers, which should help determine the risk of crime associated with cryptocurrency exchanges. Simply put, it is a software tool that allows banks and other card issuers to identify and block suspicious transactions with crypto exchanges. Mastercard already uses a similar system for fiat transactions, and they have currently expanded the technology to include cryptocurrencies.
“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,”
Ajay Bhalla, Mastercard’s president of cyber and intelligence business
The tool is powered by CipherTrace, which Mastercard acquired just last year. It uses sophisticated artificial intelligence algorithms and data from public blockchains. It then uses them to determine the crime risk level associated with crypto exchanges connected to the payment network.
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The platform offers a dashboard with colour-coded ratings representing the risk of suspicious activity. The severity of the risk is determined in the range from red for “high” risk to green for “low”. However, Crypto Secure itself does not decide whether a particular cryptocurrency trading entity should be restricted, and the final decision rests with card issuers alone. In addition, the system will ensure that Mastercard partners remain compliant with the complex regulatory environment.
Mastercard recognizes the opportunity that crypto brings
It can be seen that Mastercard is looking at the cryptocurrency market from a larger perspective, and its business strategy toward digital assets has not been fundamentally affected even by the ongoing bear market. The decrease in illegal crypto activity can only be caused by a significant drop in the prices of individual cryptocurrencies. According to Bhalla, the company is focused on providing high-quality and safe solutions to interested parties in the long term.
Although Crypto Secure does not pass final judgments on individual market participants, it provides another level of protection and advice in the crypto space for Mastercard clients. It should be noted that this company currently registers up to 2,400 cryptocurrency exchanges in its payment network, so it is a pervasive database that can be worked with further.
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Cryptocurrency payments are becoming an increasingly common part of people’s daily lives. It must be admitted that this is also thanks to the solutions of companies such as Mastercard and Visa. Visa, for example, processed more than $1 billion worth of cryptocurrency transactions last year. Together with Mastercard, they are creating new options for crypto payments around the world, and it is pretty clear that they see a huge opportunity in this young market, especially for the future.