On October 3, 2022, MasterCard introduced its crypto risk management innovation, the Crypto Secure protocol. MasterCard reportedly designed Crypto Secure to enable banks to detect suspicious activities on crypto merchant platforms.
MasterCard Introduces Crypto Secure To Curb Crypto Frauds
As the crypto industry continues to multiply, so do the crime rates within the space. Many firms have invented several security solutions to curtail rampant fraudulent activities, of which Crypto Secure is the latest.
According to the announcement, MasterCard structured the new services to fish out platforms with fraudulent operations. The financial company designed Crypto Secure using artificial intelligence coupled with blockchain tech and some other resources.
Furthermore, those components enable the service to scan crypto exchanges associated with MasterCard and fish out fraudulent ones. The financial firm had reportedly initiated a similar security service for traditional currency transactions in banks initially.
MasterCard To Use Crypto Secure To Tame Its Partners
Ajay Bhalla, the president of the security department at MasterCard, stated that the new services were a huge milestone for the firm. He added that it would help them to keep their partners obedient to local rules while preventing fraudulent acts in the crypto space.
In addition, he said it would encourage merchants, consumers, and banks to trust digital assets trading more. With the Crypto Secure service, banks and other firms that issue MasterCard can see the risk rates of different crypto merchants.
The rates, demarcated with different colors, depict different degrees of risk of fraudulent activities of a crypto merchant. Additionally, CipherTrace, a crypto-security firm in California previously bought by MasterCard in 2021, runs the Crypto Secure service.
Although the protocol does not judge on behalf of banks, it offers essential advice on each of their crypto transactions. Currently, reports show that there are about 2,400 crypto merchants that support MasterCard services.
Digital Assets Payment Options Received Wide Adoption Globally
Meanwhile, crypto payments are now becoming the order of the day, majorly because of Visa and MasterCard activities. In 2021, Visa recorded about $1 billion transactions in crypto.
Also, MasterCard recently extended its digital assets payment services to Indonesia, Argentina, and some countries in their region. Howbeit, as crypto adoption continues to increase, so do the vices that come with it.
Chainalysis, a crypto analytic firm, reported that about $14 billion in funds was lost in fraudulent activities in 2021. In addition, reports showed that investors lost about $242M to fraudsters in Australia this year.
Consequently, the rampant crimes have caused a debate admits regulators, as some see crypto as a Ponzi scheme project. Furthermore, many firms and authorities warn investors to be weary of crypto scams and frauds on social platforms.