24.10.202210:25 Forex Analysis & Reviews: Mastercard to detect crypto transaction fraud

Amid a lull in the crypto market, Mastercard has announced the release of new software that would help banks detect and block transactions with fraud-prone crypto exchanges.

The new system, called Crypto Secure, uses complex AI algorithms to determine the risk of crime associated with crypto exchanges on the Mastercard payment network. The company said that the system relies on data from the blockchain, a public record of crypto transactions, as well as other sources.

The service is powered by CipherTrace, a blockchain security startup Mastercard acquired last year. CipherTrace helps companies and state institutions investigate illicit transactions involving cryptocurrencies. Its main competitor is the New York-based firm Chainalysis, as well as Elliptic.

Mastercard noted that the service was launched due to growing crime in the nascent digital asset market. According to Chainalysis, the amount of crypto entering wallets with known criminal connections surged to a record $14 billion last year. Furthermore, 2022 saw a wave of high-profile hacking attacks and scams targeting crypto investors.

On the Crypto Secure platform, banks and other card issuers are shown a dashboard with color-coded ratings representing the risk of suspicious activity. The decision on whether to turn away a specific crypto merchant is down to the card issuers themselves, and not Crypto Secure.

Mastercard already uses a similar technology to prevent fraud in fiat currency transactions. Crypto Secure extends this functionality to Bitcoin and other cryptocurrencies. In an interview with CNBC, Ajay Bhalla, Mastercard's president of cyber and intelligence business, said that the move was about ensuring its partners can stay compliant with the complex regulatory landscape. "The whole digital asset market is now a pretty large, substantial market. The idea is that the kind of trust we provide for digital commerce transactions, we want to be able to provide the same kind of trust to digital asset transactions for consumers, banks and merchants," Bhalla said.

On the technical side, Bitcoin has recouped losses it sustained during an earlier slump. The market is now balanced once again, suggesting that risk appetite of investors is low. The key level for BTC at this point is the resistance at $19,500. The cryptocurrency needs to regain this level to begin a new upward correction. If BTC breaks above this level, it would then need to break through the resistance at $20,540 and $21,410. If BTC ends up under increased pressure, which is quite possible, bulls would need to defend the support levels of $19,100 and $18,625. A breakout below these levels would quickly push the instrument back towards the lower boundary of the sideways channel at $18,100, opening the way towards $17,580.

Ethereum has rebounded from the strong support level of $1,275 upwards and is currently moving sideways. A breakout through $1,275 could change the situation in the market significantly. However, ETH would need to settle above $1,343 to stabilize the situation and return balance. From there, Ethereum could rise towards $1,402 and $1,457, with more distant targets being $1,504 and $1,550. Continuing pressure on the instrument and a breakout below $1,275 could send the instrument down towards the support at $1,210. If ETH breaks through this level, it would slide down to $1,150, where major market players would come into play once again.