Strengthening trust to the Crypto economy

Should we feel uneasy thinking about cryptocurrencies?

Is it because we feel crypto is abused by bad actors? Could it be because it’s unregulated with minimum to no controls? Or even, is it because it’s difficult to comprehend its operational mechanisms and inherent risks?

Despite the vibes, it cannot be overlooked that cryptocurrencies are now gaining the vast acceptance of ‘good’ actors. The recent Crypto volatility issues, derived from crypto exchangers bankruptcies, i.e. 2022: the collapse of FTX, bankruptcy of Voyager and Three Arrows Capital, Luna and TerraUSD stablecoins and 2023: the collapse of Silicon Valley Bank and Signature Bank, the shutdown of Silvergate Bank, the regulatory enforcement actions in the US., did not seem to materially affect the positive characteristics of crypto. To support this, Forbes announced on 31st July this year that ‘The poster boys of the crypto market – Bitcoin and Ethereum – which showed incredible stability at the start of the year 2023, have been trading in green with marginal rise.’

It is evident that more and more consumers and of course businesses nowadays prefer the anonymity and privacy offered by cryptocurrencies, for their own reasons, and seek for the positive aspects of crypto rather than stick on the negatives. Having full ownership and control over own funds and not relying on third parties to hold on crypto owners’ assets, is gaining a big plus for experienced users. The beauty of transparency of most cryptocurrencies from operating on public blockchains, that enhances traceability, is also a big advantage. What about the reduced transaction fees, which make the local and foreign transactions so cost-effective, even for micropayments? The fact that one can conduct borderless transactions almost instantly without the need for intermediaries asking questions, and what about decentralisation without a single point of failure? All these cannot be overlooked.

But then again, decentralization refers to the absence of central authority that makes it hard to regulate, and what about the concerns on crypto volatility when from one day to another the value abruptly increases or decreases with positive and negative consequences. Stretching even more, the lack of consumer protection against crypto fraud due to the so called ‘irreversible’ transactions, the fact that one can lose the private key or wallet if not properly managed, with all its funds. And let’s not rule out wallet hacking or theft consequences.

So, how do we handle all these controversies?

Being up for it depends on the risk appetite and the limits we set. Furthermore, like all risks, we need to create controls to mitigate or limit our risks. To address these concerns, effective monitoring tools are essential.

While recognizing the criticality of this subject and the importance of security awareness and transparency, Infocreditgroup facilitates Ciphertrace, a Mastercard solution for an ease of mind. Infocredit Group's partnership with CipherTrace is a significant step toward strengthening the crypto economy and fostering trust in digital transactions.

Ciphertrace, is the world leader in cryptocurrency financial intelligence. Such intelligence tools powers blockchain analytics and compliance solutions that help to grow and strengthen the crypto economy through improved security, safety and transparency. It delivers data in real-time to support compliance with cryptocurrency AML and counter terrorism financing (CTF) regulators, blockchain forensics and regulatory monitoring solutions that make crypto assets safer.

Ciphertrace’s innovative platform helps customers enhance their security and fraud monitoring activities for crypto-related programs. It enables banks, crypto exchanges, wallets, crypto ATMs and other Virtual Asset Service Providers (VASPs) to safely process cryptocurrency and digital asset transactions while reducing risk, protecting against fraud and being compliant with regulations around the world.

Phoebus Christodoulides, Fraud and Risk Analysis Manager at Infocredit Group