Mastercard Acquires Crypto Forensics Firm CipherTrace

Credit card company Mastercard will acquire crypto forensics giant CipherTrace. CipherTrace provides transparency in crypto investments, identifying possible theft, fraud, and money laundering. The company's clients are governments and other companies that need to track crypto projects, and CipherTrace helps protect crypto companies and financial institutions from security and compliance risks. Currently, CipherTrace tracks and reports on over 7,000 crypto assets.

CipherTrace can help clients detect crime in the decentralized finance (DeFi) ecosystem, which is experiencing massive growth and attracting criminals. In mid-August, there was over $80 billion of value locked on DeFi platforms. DeFi crime this year has totaled almost $700 million.

The two main types of DeFi crimes are hacks and "rug pulls." According to CipherTrace, roughly three-quarters of DeFi crime this year has been protocol hacks, where hackers exploit the underlying code running an exchange and steal the money. About one-quarter of DeFi crime has been rug pulls, where the people running the project quit and take the money.

This is the latest move by Mastercard into the crypto space, following their announcement of crypto payment cards early this year, and the start of a crypto project launch pad this summer.