MasterCard logo on a smartphone arranged in Saint Thomas, Virgin Islands.
Gaby Jones | Bloomberg | Getty Images
Mastercard has agreed to acquire blockchain analytics startup CipherTrace, in the latest sign of how big companies are getting excited about cryptocurrency.
The payments giant said Thursday that it has entered into an agreement to purchase CipherTrace for an undisclosed amount. CipherTrace, based in Menlo Park, California, is developing tools that help businesses and law enforcement root out illicit cryptocurrency transactions. Among the company’s competitors, New York-based Chainalysis and London-based startup Elliptic.
“Digital assets have the potential to reimagine commerce, from everyday chores like paying and earning money to transforming economies, making them more inclusive and efficient,” Ajay Bhalla, Head of Electronic Information and Intelligence at Mastercard, said in a statement. “With the rapid growth of the digital asset ecosystem, comes the need to ensure that it is reliable and secure.”
The financial terms of the deal were not disclosed. Mastercard shares rose about 0.6% Thursday morning in New York.
One of the main concerns about Bitcoin and other cryptocurrencies is that the people who transact with them are anonymous. This has made the digital asset the currency of choice for a number of hackers and other criminals. However, the blockchain is a public ledger of all cryptocurrency transactions, and services like CipherTrace analyze the movements of funds to ascertain if they are suspicious.
Mastercard said the deal will help its customers protect themselves and comply with regulations as they begin building their crypto offerings. CipherTrace says its platform is used by some of the world’s largest banks and cryptocurrency exchanges.
The deal is the latest sign of how major companies are showing increased interest in the crypto market. Mastercard itself has said it will open up its network to identify cryptocurrencies this year, while rival Visa recently unveiled more than $1 billion in cryptocurrency by consumers using crypto-linked payment cards.
Bitcoin traded at around $47,000 on Thursday, up nearly 2% in the past 24 hours. The world’s largest digital currency fell sharply on Tuesday after El Salvador adopted it as legal tender.
Cryptocurrency proponents saw the move as a step towards broader adoption of the asset class. However, the introduction of bitcoin in El Salvador has not been without problems, as the country has temporarily disabled the official bitcoin wallet to increase the capacity of its servers.
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