Mastercard
California-based CipherTrace specializes in developing software meant to aid in the tracing of illicit cryptocurrency transactions. Currently, the company provides security solutions for a variety of customers, from banks to law enforcement agencies. CipherTrace's protection could likely extend to Mastercard customers looking to invest in cryptocurrency as part of the deal.
"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," President of Mastercard Cyber & Intelligence Solutions Ajay Bhalla.
The move is the latest expansion into the growing cryptocurrency market by Mastercard, which announced that it would support selected cryptocurrencies on its financial network earlier this year. The ever-increasing interest that many financial firms are showing in crypto markets is hardly surprising, given the explosion in interest by American consumers in the casual trading of securities and digital assets.
The growing embrace of cryptocurrencies by national governments can also be seen as a catalyst for further investment in crypto infrastructure, such as the case of El Salvador, which recently adopted Bitcoin as legal tender.
However, many regulators and watchdogs are raising concerns over the volatility of cryptocurrencies and the potential for more significant abuse of digital assets for illicit trade. Given the difficulty of tracing cryptocurrency transactions, many regulators have pushed for greater oversight, with officials such as Securities Exchange Commission (SEC) Chair Gary Gensler calling for new legislation.
Others are more worried about the feasibility and stability of further implementation, even with government oversight. Returning to the case of El Salvador, the adoption of Bitcoin has been a rather trying process, with service outages reported as the government scrambles to expand infrastructure to meet demand.
Mastercard shares saw a slight pop in value today, though it's hard to say how much help the company had from the announcement. Shares were up 0.22% just before market close on Thursday.
- https://www.businesswire.com/news/home/20210909005577/en/Mastercard-Acquires-CipherTrace-to-Enhance-Crypto-Capabilities
- https://www.cnbc.com/2021/09/09/mastercard-to-buy-blockchain-analytics-start-up-ciphertrace.html
- https://www.marketwatch.com/story/mastercard-to-buy-ciphertrace-to-strengthen-crypto-capabilities-271631194150