MasterCard says it has acquired CipherTrace, a company that sells cryptocurrency anti-money laundering services, to increase its expertise in the field of cryptocurrencies.
CipherTrace is described as a crypto forensics startup that uses sophisticated technology coupled with human intelligence to analyse blockchain transactions to help companies and law enforcement monitor suspicious activity and map out the crypto-criminal ecosystem.
Its mission is to protect financial institutions from virtual asset laundering risks and crypto-related threats while its vision is to grow the blockchain economy by making it safe for users and trusted by government.
While announcing the acquisition, Masercard observed that cryptocurrencies and non-fungible tokens (NFTs) are becoming more commonplace, particularly in terms of how payments are made and how people invest.
According to the 54-year payments giant, the move to acquire CipherTrace will help it become a key player in establishing trust and privacy in these new technologies.
To this end, MasterCard plans to introduce a service that integrates CipherTrace’s capabilities. The deal will allow it to combine the technology, AI, and cyber capabilities of both companies to differentiate its card and real-time payments infrastructure.
MasterCard notes that this offering will make it easier for players in crypto to comply with regulations.
The under-regulation of the emerging markets across cryptocurrencies and blockchain has attracted complaints from players who are wary of the field being exploited by illicit actors. The proliferation of scams in the virtual assets service provider (VASP) sector in particular has posed a challenge to authorities across countries in Africa making it difficult to help victims recover their funds.
MasterCard says it will also rely on the network and experience of CipherTrace, including its partners like fintechs, crypto-wallet providers, and governments, as it seeks to establish itself in crypto security and compliance. The acquisition of CipherTrace is part of its desire to provide more choice to its customers, whether consumers, merchants, or businesses.
Some of the other investments MasterCard has made in crypto include:
Partnerships with Uphold, Gemini, and BitPay to create crypto cards
The creation of new platforms to test and support Central Bank Digital Currencies
Programs to support the broader use of blockchain technology and NFTs
Potential to support select stablecoins directly on its network
As Mastercard gears to be a major player in crypto risk and compliance, its just one example out of several established financial players that have invested in startups developing crypto infrastructure.
Some others include:
Standard Chartered Bank’s investment in Metaco, an orchestrasation platform for businesses trading crypto
Visa’s investment in Anchorage, a firm which relies on biometric-based software and multiple human reviews to safeguard investors’ digital currency.