Payments giant Mastercard has agreed to acquire blockchain analytics start-up CipherTrace, a leading cryptocurrency intelligence company with insight into more than 900 cryptocurrencies, in the latest sign of how major companies are warming to cryptocurrencies. Mastercard said Thursday it entered into an agreement to buy CipherTrace for an undisclosed amount.
As digital assets, including cryptocurrencies 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. These new technologies will require new solutions and more powerful intelligence to ensure that the crypto economy is instilled with the same trust and peace of mind that consumers currently experience with more traditional payment methods.
Based in Menlo Park, California, CipherTrace develops tools that help businesses and law enforcement root out illicit digital currency transactions. The company’s competitors include New York-based Chainalysis and London start-up Elliptic.
Ajay Bhalla, President of Cyber and Intelligence at Mastercard, said in a statement: “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.”
A key concern with bitcoin and other cryptocurrencies is that the people transacting them are anonymous. That has made digital assets the currency of choice for a number of hackers and other criminals. However, the blockchain is a public ledger of all digital currency transactions, and services like CipherTrace’s analyze movements of funds to ascertain whether they’re dubious.
Mastercard said the deal would help its customers protect themselves and comply with regulations as they start to build out their own digital currency offerings. CipherTrace says its platform is used by some of the world’s largest banks and crypto exchanges.
The deal is the latest sign of how major corporates are showing increased interest in the crypto market. Mastercard itself said it would open its network up to select cryptocurrencies this year, while rival Visa recently disclosed more than $1 billion worth of crypto was spent by consumers using its crypto-linked payment cards. Bitcoin was trading at around $47,000 Thursday, up nearly 2% in the last 24 hours. The world’s largest digital coin slumped sharply on Tuesday after El Salvador adopted it as legal tender.
Proponents of cryptocurrencies saw the move as a step toward wider adoption of the asset class. However, El Salvador’s bitcoin rollout wasn’t without its issues, with the country temporarily disabling its official bitcoin wallet to increase the capacity of its servers.
