In 2021, global blockchain analytics leader CipherTrace was valued at $2 billion, then $4 billion, in its April and June fundraisings. Compliance and adherence to anti-money laundering standards have become survival issues for companies in the Bitcoin (BTC) ecosystem. Companies specializing in analytics have thus become prime targets for investors and large corporations, starting with Mastercard.
CipherTrace, the cryptosphere investigator in the shadow of its competitors
Founded in 2015, CipherTrace is a company specializing in blockchain data analysis. Its motto is “to be the bridge between digital assets and financial institutions, providing fraud prevention and anti-money laundering solutions.”
Since its inception, the company has provided its services to more than 200 clients, including banks and government agencies. In addition to collecting data in the crypto space, CipherTrace publishes annual reports on its trends, but also monthly reports on criminal activity within the cryptosphere.
Although the company is one of the leaders in its industry, its business volume is significantly lower than its competitors. According to data from The Block, CipherTrace accounts for only 0.67% of US federal contracts involving the monitoring of blockchain activities. With $150,000 in business volume, compared to Chainalysis’ $22 million, CipherTrace ranks last in the US.
In order to gain ground on its competitors, CipherTrace has therefore increased its initiatives and product and service launches. In April 2021, the company launched a tool that allows decentralized exchanges to block addresses designated by the Office of Foreign Assets Control (OFAC). OFAC-sanctioned addresses are typically associated with the financing of terrorism, the financing of weapons of mass destruction or any other activity deemed to be contrary to the national interest of the United States.
Mastercard boosts surveillance capabilities with CipherTrace
In a September 9 press release, Mastercard announced its acquisition of CipherTrace. Terms of the deal were not disclosed. And the deal is expected to close before the end of the year, subject to certain conditions.
“Digital assets have the potential to reinvent 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 its reliability and security. Our goal is to leverage the complementary capabilities of Mastercard and CipherTrace to achieve this.”
Ajay Bhalla, president of Cyber & Intelligence at Mastercard
Once Mastercard integrates CipherTrace, it will be able to make use of its technologies to analyze its card fleet in real time. This will enable Mastercard’s customers and partners to enjoy the benefits of digital assets in a fully compliant environment.
The acquisition is part of the payment service provider’s crypto-global strategy. It follows a number of investments made by the company. In addition, Mastercard has partnered with Uphold, Gemini and BitPay to create crypto cards. Finally, Mastercard revealed its ambitious crypto strategy in July, aiming to eclipse its longtime competitor, VISA.
