Global payment system Mastercard is strengthening its defenses against cryptocurrency-related crime amid extremely high levels of fraud in the industry. The growth of fraud in cryptocurrency transactions is five times higher than in regular fiat transactions.
With this in mind, the financial giant announced a partnership and collaboration with the intelligent platform Feedzai. Feedzai specializes in fighting cybercriminals, laundering illicit funds using artificial intelligence (AI), and financial fraud, CoinGape reported.
According to statistics, the total losses from phishing, hacking, and other cryptocurrency fraud exceeded $1 billion in the first half of 2023. The vast majority of stolen cryptocurrency is accounted for by tokens issued on the Ethereum blockchain, which amounted to 75.6%. At the same time, the majority of stolen cryptocurrency is related to the vulnerability of smart contracts (more than 56%).
Mastercard emphasizes its commitment to ensuring the security of cryptocurrency transactions and helping prevent illegal transactions. The company is taking the necessary measures to bring digital assets into compliance with basic financial regulations.
Working with the Feedzai platform will allow Mastercard to strengthen its fight against cryptocurrency fraud and financial crime. By partnering with a regulatory technology platform known for its expertise in intelligently fighting financial fraud with AI, the company will be able to take a big leap forward in its crypto security practices.
According to Mastercard, the exclusive collaboration aims to facilitate fraud detection by integrating Feedzai's technology with Mastercard's CipherTrace Armada platform. Unlike traditional API access, the integration with Feedzai provides the ability to receive real-time notifications of suspicious cryptocurrency transactions. This further strengthens users' defenses against online fraudsters.
Feedzai CEO Nuno Sebastio said, "The partnership not only helps detect cryptocurrency fraud but also aims to prevent potential money laundering and the use of 'mule accounts' for laundering illicit funds.
Since 40% of fraudulent transactions from bank accounts are made on cryptocurrency exchanges, this partnership between the payment system and the Feedzai platform could be key to protecting financial transactions in the cryptocurrency industry.
Mastercard's decision is a strategic move to legalize cryptocurrency as a mainstream financial asset, subject to the same rules as traditional assets. The partnership also aims to address regulators' concerns about the lack of comprehensive regulation of crypto assets and the rise of fraud in the cryptosystem.
Mastercard president Ajay Bhalla commented, "With the rise of fraud in cryptocurrency transactions, the alliance with Feedzai gives financial institutions the ability to distinguish between legitimate and suspicious transactions."
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