Mastercard is joining forces with Feedzai to tackle concerns surrounding cryptocurrency fraud and money laundering through the use of artificial intelligence to distinguish between legitimate and fraudulent transactions.
Mastercard has announced its partnership with Feedzai, a regulatory technology platform that utilizes artificial intelligence to combat online money laundering and financial scams in the crypto space. The collaboration aims to integrate Feedzai’s technology with Mastercard’s CipherTrace Armada platform to monitor transactions from over 6,000 crypto exchanges for potential fraud, money laundering, and other suspicious activities. This move reflects Mastercard’s commitment to integrating cryptocurrency into mainstream financial assets, subjecting them to established rules and compliance frameworks.
In an exclusive statement to CNBC, Mastercard revealed that the partnership with Feedzai will enhance fraud detection and enable the identification of potential money laundering activity and mule accounts. Fraudsters exploit mule accounts, which are accounts belonging to users, to launder illicitly obtained funds. The collaboration will also provide Mastercard with access to Feedzai’s artificial intelligence capabilities, allowing for swift identification and blocking of suspicious transactions, while accurately recognizing legitimate transactions.
Following the acquisition of CipherTrace in 2021, this strategic collaboration further strengthens Mastercard’s efforts to enhance security and compliance in the cryptocurrency field.
For more insights into this collaboration, read the detailed information below.
Mastercard’s Venture into Crypto Fraud Prevention
Mastercard Inc (NYSE: MA) is ramping up its initiatives to identify and prevent fraud associated with crypto exchanges. The company’s recent partnership with Feedzai, a leading regulatory technology platform specializing in leveraging artificial intelligence, aims to combat online money laundering and financial scams, particularly in the fast-growing crypto space.
Feedzai, known for its cutting-edge technology, will integrate with Mastercard’s CipherTrace Armada platform, which monitors transactions from over 6,000 crypto exchanges for potential fraud, money laundering, and other suspicious activities. This direct integration will enable real-time alerts for suspicious cryptocurrency transactions, without relying on an API, strengthening the detection and prevention of fraudulent activities.
Nuno Sebastio, CEO and co-founder of Feedzai, highlighted the significance of this partnership in enhancing fraud detection and preventing money laundering activities. Sebastio emphasized that this collaboration will significantly benefit consumers by protecting them from potential fraud, and will also help in identifying and curbing money laundering activity and mule accounts used by fraudsters.
According to Feedzai’s data, approximately 40% of scam transactions involve the direct transfer of funds from a bank account to a cryptocurrency exchange, underscoring the urgency of implementing robust measures to combat fraudulent activities in the crypto space.
Will Mastercard Make Crypto Mainstream?
Mastercard’s collaboration with Feedzai signals the company’s commitment to integrating cryptocurrency into mainstream financial assets and subjecting them to established rules and compliance frameworks. While banks and major financial institutions have shown interest in experimenting with crypto, incorporating crypto products into their core offerings has posed challenges due to concerns about the lack of comprehensive regulations and susceptibility to fraud and scams.
By leveraging artificial intelligence to differentiate between legitimate and fraudulent transactions, particularly in the crypto space where fraud rates are reportedly five times higher than in regular fiat transactions, Mastercard aims to address these concerns and pave the way for greater mainstream adoption of cryptocurrencies in the financial sector.
What is the significance of the partnership between Mastercard and Feedzai?
The partnership aims to leverage artificial intelligence to combat online money laundering, financial scams, and fraud associated with crypto exchanges.
How will the collaboration benefit consumers and financial institutions?
The partnership will enhance fraud detection, protect consumers from potential fraud, and enable financial institutions to identify and prevent money laundering activity and mule accounts.
What are the key statistics highlighted in the collaboration?
Feedzai’s data indicates that approximately 40% of scam transactions involve the direct transfer of funds from a bank account to a cryptocurrency exchange, emphasizing the urgency of implementing robust measures to combat fraudulent activities in the crypto space.