Mastercard has agreed to buy blockchain anti-money laundering (AML) start-up CipherTrace for an undisclosed amount.

The California-based start-up, founded in 2015, provides tools to help businesses and regulators spot illegal cryptocurrency transactions.

CipherTrace competes in the crypto AML space with New York-based firm Chainalysis, which was valued at $4.2 billion in April, and London start-up Elliptic.

Mastercard said the integrated offering will build on CipherTrace’s suite of digital assets and Mastercard’s cyber security solutions to provide businesses with tools to help identify and understand their risks and manage their digital asset regulatory and compliance obligations.

The start-up was initially backed by the US government’s Department of Homeland Security and Defence Advanced Research Projects Agency and has also received funding from WestWave Capital and Third Point Ventures.

The news comes as Mastercard turns its eyes towards more cryptocurrency start-ups; in July, it launched a new cryptocurrency, digital assets, and blockchain programme for start-ups involving seven companies.

The card giant also partnered with Winklevoss twin backed crypto exchange Gemini and WebBank to issue a credit card in April.

The EU is currently tightening up its legislation on cryptocurrency money laundering; in July, the European Commission proposed legislation that will extend AML rules to the entire crypto industry, obliging all service providers to conduct due diligence on their customers.

The transaction is anticipated to close before the end of the year, pending certain conditions.

“Digital assets have the potential to reimagine commerce, from everyday acts like paying and getting paid to transforming economies, making them more inclusive and efficient,” said Ajay Bhalla, president of cyber and intelligence at Mastercard. “With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe.”

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