Mastercard, the bank card giant, is about to launch a new service aimed at fighting fraud on cryptocurrency trading platforms.
The new service will allow banks and credit card providers to detect and even block fraudulent transactions originating from cryptocurrency platforms, according to the news portal CNBC exclusively.
The system, known as Crypto Secure, will make use of sophisticated artificial intelligence algorithms to detect potential scams. The service will use banking databases, as well as information from cryptocurrency networks and other sources, to design its alert scheme.
As reported by CNBC, the system will display a risk dashboard, which will indicate how dangerous a transaction could be for a user, according to a color system: red for high risk and green for low risk. This panel will be exclusive to banks and card providers, who will be responsible for deciding whether or not to process a transaction. Crypto Secure will only serve as an alarm system.
Mastercard currently has a similar service for transactions on fiat platforms. Crypto Secure will be a specialized service for trading on cryptocurrency platforms.
The rationale for the launch is based, as Ajay Bhalla, president of Mastercard for cyber business explains, on "providing the same kind of trust [as in spot trading] to digital asset transactions for consumers, banks and merchants." Bhalla explains that cryptocurrencies have seen quite large growth in recent years, which has made them the target of scams and scams.
What about user data?
The system was designed by CipherTrace, a security startup acquired by Mastercard. This company got involved in a controversy last year as the developer of the travel rule implementation software.
This system tracks each user's transactions, effectively breaking the privacy that networks like Bitcoin provide to their users.
In the announcement of the launch of Crypto Secure it is not specified which user information will be collected. However, under pressure from regulators, all debit and credit card providers are obligated to require their users to verify identity, which can be used to power this system's security algorithm.
