Mastercard to Acquire Crypto Tracing Firm CipherTrace

Payments giant Mastercard has agreed to buy CipherTrace, a firm that scans blockchains for illicit transactions.

The surprise acquisition announced Thursday by the companies in a press release gives Mastercard the ability to track over 900 cryptocurrencies. Details of the acquisition were not disclosed.

The deal is the latest sign of robust activity in the crypto tracing sector as governments and banks look to ramp up monitoring and compliance.

Earlier this year, Daniel Loeb’s Third Point Ventures led a $27 million investment in CipherTrace. That round was on the heels of a $100 million Series D that valued competing firm Chainalysis at $4.2 billion.

In a statement, Mastercard President of Cyber & Intelligence Ajay Bhalla said, “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.”

Mastercard has been ramping up its crypto efforts of late. In July, the payments giant said it would be piloting the use of the Circle-administered USD coin (USDC) as a key bridge between crypto-using buyers and cash-loving merchants. In February, Mastercard said it was planning to let merchants accept crypto through its network by year’s end.

“Our philosophy on cryptocurrencies is straightforward: It’s about choice,” Mastercard’s crypto VP, Raj Dhamodharan, said at the time. “Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.”

UPDATE (Sept. 10, 2021, 12:15 UTC): Corrects Chainalysis’ valuation, clarifies Mastercard has agreed to acquire CipherTrace.