BlackRock warns investors of crypto scams amid ETF boom

On Monday, BlackRock issued an advisory on investment-linked scams emerging in the market. The financial giant mentioned a spike in cryptocurrency fraud attempts, which may be linked to the recent growth of the digital assets industry through exchange-traded funds (ETFs).

BlackRock, in an X post, mentioned a recent surge in fraudulent activities where users have been directed toward crypto investment-related websites and social media platforms such as Telegram or WhatsApp. It urged caution when dealing with individuals, websites, and social media platforms that offer investment opportunities.

Scammers approach victims as BlackRock reps

There has been a spike in investment-related scams, including directing users toward crypto investment-related websites and/or social media platforms such as WhatsApp or Telegram. We urge caution in dealing with individuals, websites or social media platforms using our brand and…

— BlackRock (@BlackRock) July 28, 2024

Scammers are allegedly using BlackRock to target crypto ETF investors via multiple sources. BlackRock advises that none of its executives would contact anyone on any social media platforms with finance related offers. The financial firm asked users to remain vigilant and not to proceed if they suspect any suspicious activity.

BlackRock’s iShares Bitcoin Trust (IBIT) has gathered over $19.7 billion in Bitcoin since its simultaneous launch with other ETFs in January 2024. It currently holds the top position among other spot BTC ETFs. Grayscale Bitcoin Trust ETF (GBTC) has endured an outflow of $18.81 billion in the same period.

BlackRock’s iShares Ethereum Trust (ETHA) is emerging as a key player in the ETH ETF category. ETHA has seen a $442.1 million inflow since the beginning of trading while Grayscale’s ETHE recorded the highest amount of outflow with $1.51 billion.

Scope for more crypto ETFs?

Robert Mitchnick, the Head of Digital Assets for BlackRock, cast doubt on the approval of new crypto ETFs at the Bitcoin Conference 2024. This includes ETFs for top tokens like Solana (SOL) and Ripple (XRP). He cited Bitcoin and Ether’s dominance in the market. He also highlighted the SEC’s cautious stance on ETFs offering staking services as barriers to new crypto ETFs despite high institutional interest.

Nate Geraci, president of ETH Store, somehow challenged Mitchnick’s skepticism about altcoin ETFs. He noted Europe’s success with similar products for Solana, XRP, and Cardano. However, he believes that regulatory changes could allow similar adoption in the US.

Bitcoin was on an upward trajectory before spot Bitcoin ETFs began trading in the US market. It has maintained its momentum so far, up by 65% on the year-to-date (YTD) basis. BTC is trading at an average price of $69,784, at the press time.

Ether saw a major correction due to such fluctuations in the ETF arena. ETH price dropped by around 4% in the last 7 days. However, it managed to pick up in the last 24 hours by surging 3.3%. ETH is trading at an average price of $3,377, at the press time.