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Mastercard has agreed to acquire CipherTrace, a blockchain analytics company that sells cryptocurrency anti-money laundering services, because the payment company has increased its bets on digital assets.
The company said on Thursday that the transaction will allow Mastercard to “distinguish its card from real-time payment infrastructure” by helping its customers comply with regulations, as they increasingly “build their own virtual asset products.” The terms of the transaction were not disclosed.
The ability to hold most cryptocurrencies anonymously makes them Attractive to criminals Those who are looking for money laundering. However, every transaction is usually recorded on an immutable blockchain, leaving a visible trail for researchers.
CipherTrace is one of a growing number of crypto forensics start-ups that use complex technology and human intelligence to analyze blockchain transactions, help companies and law enforcement agencies monitor suspicious activities and map the crypto crime ecosystem.
This transaction was announced by MasterCard in February that it would Start to support Selected cryptocurrency directly on its network this year, following The footsteps of fintech rival PayPal And square.At the same time, U.S. regulators are Getting around A constantly evolving but loosely regulated industry.
Ajay Bhalla, President of Mastercard Networks and Intelligence, said: “Digital assets have the potential to reimagine business, from daily behaviors such as payment and getting paid to economic transformation, making it more inclusive and efficient.”
“With the rapid growth of the digital asset ecosystem, we need to ensure its credibility and security. Our goal is to use the complementary capabilities of MasterCard and CipherTrace to do this.”
CipherTrace was established in 2015, initially funded by the U.S. Department of Homeland Security and the Defense Advanced Research Projects Agency, and supported by Silicon Valley investors including WestWave Capital and Third Point Ventures.
According to its website, it has 150 customers, including banks, cryptocurrency exchanges, institutions, and regulators. Competitors include New York-based Chainalysis, which raised $100 million at a valuation of more than $4 billion earlier this year, and London-based Elliptic, whose investors include Wells Fargo.
Dave Jevans, CEO of CipherTrace, told the Financial Times: “This is a real coup for the legalization of the financial services industry.”
Mastercard stated that the acquisition is part of a broader strategy to “help customers, merchants and companies in the digital asset sector provide more choices in how to transfer digital value” and follow many similar investments.
Earlier this year, MasterCard announced a partnership with Gemini, a US cryptocurrency exchange founded by the Winklevoss twins, to launch a crypto reward card. It has similar moves with Uphold and BitPay. It also stated that it has invested in supporting the growing market of non-fungible tokens or NFTs and is developing a platform to test central bank digital currencies.