Mastercard ramps up its vigilance to combat fraud in cryptocurrency exchanges, forging an alliance with Feedzai to fortify their surveillance efforts.
In an exclusive disclosure to CNBC, Mastercard revealed its intensified efforts to prevent and detect fraud within cryptocurrency exchanges. The company has partnered with Feedzai, a regulatory technology platform leveraging artificial intelligence to combat online money laundering and financial scams.
Advanced Integration for Enhanced Vigilance
Through this partnership, Feedzai will seamlessly integrate with Mastercard’s CipherTrace Armada platform. This platform is instrumental in aiding banks to vigilantly monitor transactions across over 6,000 cryptocurrency exchanges, specifically targeting fraud, money laundering, and suspicious activities.
Notably, Feedzai will directly embed CipherTrace Armada into its technology, enabling real-time alerts regarding potentially fraudulent cryptocurrency transactions.
Bolstering Fraud Detection and Prevention
Nuno Sebastião, CEO, and co-founder of Feedzai highlighted the partnership’s significance in enhancing fraud detection. Sebastião emphasized the added protection for consumers, detection of potential money laundering activities, and identification of mule accounts used by fraudsters.
According to Feedzai’s data, an alarming 40% of scam transactions stem directly from bank accounts routed to crypto exchanges.
Mastercard’s Push for Crypto Legitimization
This strategic move by Mastercard signifies a significant effort to integrate cryptocurrencies into the mainstream financial ecosystem, subjecting them to similar regulations and compliance frameworks as traditional assets.
Despite increased interest from banks and financial institutions in utilizing cryptocurrencies, concerns around fraud and scams persist due to the lack of comprehensive regulations and applications of digital assets.
Crypto’s Fraught Path to Mainstream Acceptance
The rise in thefts and scams within the crypto realm, leading to a staggering 79% global increase in crypto-related losses compared to the previous year, poses challenges to its wider acceptance.
While Mastercard’s extensive global network facilitates payment processing for banking institutions, hesitancy prevails among UK banks in engaging with cryptocurrencies. Major lenders like JP Morgan, NatWest, and HSBC have restricted or blocked crypto transactions due to perceived fraud risks.
Mastercard’s Proactive Approach to Combat Fraud
Ajay Bhalla, Mastercard’s president of cyber and intelligence solutions, highlighted the escalating fraud associated with crypto transactions. He underscored the imperative nature of Mastercard’s collaboration with Feedzai to discern and differentiate between legitimate and fraudulent transactions.
The partnership builds on Mastercard’s previous acquisition of CipherTrace, culminating in the launch of CryptoSecure. This initiative aimed to analyze and block transactions from crypto exchanges susceptible to fraudulent activities.
Mastercard’s proactive measures underscore its commitment to curbing fraud within the evolving landscape of digital assets and cryptocurrency exchanges.
