CipherTrace has begun notifying clients that it will be shutting down a major product.
CipherTrace, a cryptocurrency analysis company owned by Mastercard, has notified customers that a major service will be shut down, according to people familiar with the matter. In response to inquiries from luckthe credit card giant acknowledged that this was the case, but did not provide further details on the rationale.
Affected products include Armada, which provides risk and fraud models for cryptocurrency transactions to financial institutions, Inspector, which provides an interface to track transactions, and Sentry, an anti-money laundering tool.
said Seth Eisen, Mastercard's senior vice president of communications. luck Despite the decision to discontinue the product, CipherTrace is not shutting down. “We remain confident in the long-term potential of cryptographic analysis and cryptographic intelligence,” he said.
The decision to suspend the product comes just one month after Mastercard told a federal judge that it was retracting a report written by the company's head of investigations and intelligence in an ongoing criminal trial. The company said at the time that it decided to retract the report due to data quality issues.
Mastercard virtual currency bets
Mastercard acquired CipherTrace in 2021 as the payments company expands into cryptocurrencies, combining CipherTrace's analytical tools with Mastercard's cybersecurity solutions to provide “more transparency” to identify and understand risks. It advertised the possibility of providing companies with “sexuality.”
“Digital assets have the potential to rethink commerce,” Ajay Birla, Mastercard's president of cyber intelligence, said in a press release at the time. “With the rapid growth of the digital asset ecosystem, there is a need to ensure that it is trusted and secure.”
Blockchain analysis has long been one of the hottest areas in the cryptocurrency space, with organizations ranging from law enforcement to private companies leveraging the services of companies like CipherTrace to improve their platform performance. analyzes cryptocurrency transactions to help identify fraud and illegal activity.
CipherTrace's main competitors include Chainaracy, TRM Labs, and Elliptic, which was valued at $8.6 billion in a 2022 funding round.
Following the 2021 acquisition, the three co-founders who launched Ciphertrace in 2015 remained with Mastercard. Former CipherTrace CEO Dave Jevans resigned from his role as executive vice president at Mastercard last month, according to LinkedIn.
The rise of tracing
Blockchain analysis has played a key role in recent civil and criminal trials, including the recent conviction of FTX founder Sam Bankman Fried. The reliability of cryptocurrency traces was called into question during the trial of the founder of cryptocurrency mixer Bitcoin Fog, with defense attorneys arguing that data findings from Chainalysis should be ruled inadmissible.
Lawyers asked Jonelle Still, director of research and intelligence at CipherTrace, to prepare a report calling Chainalysis' attribution “unverifiable” and prosecutors' investigation “grossly incomplete.” insisted. The attacks on competitors have sent shockwaves through the world of blockchain analytics, especially since the report appears to cast doubt on the entire industry, with many companies relying on government customers to run their businesses. , shocked the world of blockchain analysis.
Mastercard withdrew Mr. Still's report in February, and its lawyers said in a letter that the data CipherTrace relied on was itself “unverifiable and unauditable,” and the issues clearly predate the acquisition. said that this was due to data collection practices. Mastercard said in the letter that it was conducting a “prompt and privileged investigation” into the report's authenticity.when asked luck Eisen declined to comment on whether the decision to discontinue the product was related to the investigation.
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