MasterCard Acquiring Leading Crypto Intelligence Firm CipherTrace
Market Musings

MasterCard Acquiring Leading Crypto Intelligence Firm CipherTrace

By Leo Jakobson
1mo ago
3m

The credit card giant sees the deal as part of a broader strategy to protect its business from DeFi projects that want to cut middlemen out of the payments industry.

MasterCard Acquiring Leading Crypto Intelligence Firm CipherTrace

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Mastercard just doubled down on its move into the digital assets market by purchasing  CipherTrace, a leading cryptocurrency intelligence firm with deep expertise in cybercrime, regulatory compliance and fraud protection.

A leader in tracking cryptocurrency transactions, CipherTrace works with banks and financial institutions, exchanges and payment processors, law enforcement agencies and regulators.

The firm can track more than 800 cryptocurrencies with its CipherTrace Inspector financial investigations and blockchain forensics tool. A year ago, it added Monero tracing capabilities as part of a contract with the U.S. Department of Homeland Security to beef up the agency’s ability to investigate the top privacy coin. 

CipherTrace CEO Dave Jevans said:

“We help companies — whether they are banks or cryptocurrency exchanges, government regulators or law enforcement to keep the crypto economy safe. Our two companies share this vision to provide security and trust throughout the ecosystem.”

The credit card and payments giant plans to integrate CipherTrace into its own cybersecurity solutions “to provide businesses with greater transparency to help identify and understand their risks and to help manage their digital asset regulatory and compliance obligations,” Mastercard said.

That is growing more and more important and digital assets like cryptocurrencies, stablecoins and non fungible tokens (NFTs) “become more intertwined with everyday activities — from the way people pay and get paid to how they invest — trust and security will be critical enablers to ensure broad adoption and scale,” Mastercard added. 

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The goal is to differentiate Mastercard’s real-time payments infrastructure which is a prime target of many DeFi projects seeking to disintermediate financial middlemen with blockchain-based platforms that can transfer money around the world in seconds and for pennies — far faster and cheaper than the world’s legacy payments system.

Ajay Bhalla, Mastercard's president of cyber and intelligence, said:

“Digital assets have the potential to reimagine commerce, from everyday acts like paying and getting paid to transforming economies, making them more inclusive and efficient. With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe. Our aim is to build upon the complementary capabilities of Mastercard and CipherTrace to do just this.”

Mastercard said the deal is part of its digital assets strategy, which is aimed at providing “customers, merchants and businesses with more choice in how they move digital value,” the company said.

In February, Mastercard announced that it would add the capability to let merchants accept payment in cryptocurrencies by the end of the year.
Other recent deals include partnerships with Uphold, Gemini and BitPay to create crypto cards. Mastercard has also invested in platforms to help governments test and implement central bank digital currencies, to support the broader use of blockchain technology and NFTs, and to give it the ability “to support select stablecoins directly on its network.”

Mastercard expects the acquisition to be finalized before the end of the year.