BlackRock Issues Warning About Surge in Cryptocurrency Scams

BlackRock has recently issued a stern warning about cryptocurrency-related scams circulating on social media. "We urge caution in dealing with individuals, websites, or social media platforms using our brand and offering training or investments," the company cautioned, emphasizing that it never reaches out through social media channels.

In a proactive move last year, BlackRock took legal action against the owners of several fraudulent domains that impersonated the New York-based company to swindle investors. Notably, some of these deceptive sites were tied to cryptocurrency. A particularly egregious instance occurred last December when a fraudster filed for an XRP exchange-traded fund (ETF) named “BlackRock iShares XRP Trust,” causing a significant surge in the price of the Ripple-linked cryptocurrency. BlackRock quickly clarified that this filing was fake.

In a recent CNBC interview, BlackRock CEO Larry Fink described Bitcoin as a "legitimate" investment, a notable shift from his 2017 view of the cryptocurrency as merely a tool for money laundering. This year, BlackRock's successful launch of a Bitcoin ETF and, more recently, an Ethereum ETF, which outperformed competing products, underscores this evolving perspective.

However, the landscape is fraught with risk. According to the Federal Bureau of Investigation (FBI), cryptocurrency investment scams led to nearly $4 billion in losses in the US last year. The advent of generative AI technology has further complicated matters, making it easier for scammers to produce convincing deepfakes to deceive crypto investors. BlackRock's warning serves as a crucial reminder of the vigilance needed in navigating the rapidly evolving crypto market.