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BlackRock Confronts Crypto Scams After Ethereum ETF Launch

Published

4 months ago

July 29, 2024

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In the aftermath of BlackRock’s recent Spot Ethereum ETF launch on July 23, the world’s largest asset manager has issued a stern warning about a rise in crypto investment-related scams. The company, which manages $10.6 trillion in assets, is urging caution as fraudsters increasingly use its name to deceive potential investors. Moreover, since Ethereum ETFs have led to a heightened interest in crypto investments, more people are prone to such scams.

BlackRock Issues Stark Warning Against Crypto Scams

In a post on X, BlackRock stated, “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.” Moreover, the company emphasized that neither BlackRock nor its executives ever solicit investments or payments via social media.

The organization advised, “Please remain vigilant and if you suspect fraudulent activity, do not proceed.” Further details on the asset manager’s website outline the sophisticated methods used by scammers. They also noted that these fraudsters invest time in researching their targets to build a rapport and gain trust.

In addition, they may present themselves as charming and knowledgeable, using legitimate-sounding names and information to appear credible. One common tactic involves creating phishing websites and fake platforms designed to capture personal information. Once obtained, this data is used to offer seemingly attractive investment opportunities.

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Impersonation Of Executives

Impersonation is another prevalent strategy, with scammers using the names of actual BlackRock employees or executives to appear legitimate. However, the firm affirmed that their executives never reach out to potential investors via social media. In addition, fraudsters behind crypto scams use platforms like WhatsApp and Telegram to offer fake training sessions promising high returns.

These group chats create a sense of urgency and fear of missing out, pressuring individuals to invest quickly. Moreover, the asset manager also warns about the use of fake email addresses and documentation. These include investment prospectuses and application forms that appear authentic. Also, scammers may create domains and email addresses that closely resemble those of genuine companies to trick unsuspecting victims.

Time pressure is another strategy, where scammers create a sense of urgency by offering time-limited investments. This strategy plays on the fear of missing out (FOMO). Hence, it pushes individuals to make quick decisions without thorough verification. This tactic especially works for those interested in crypto investments as the market is volatile and demands immediate action.

Additionally, social engineering techniques are employed to manipulate individuals into divulging confidential information. Spoofing, where messages, emails, or phone calls are made to appear as if they come from legitimate companies, is another method used to deceive potential victims.

The warning from BlackRock comes at a crucial time as the interest in their new Ethereum ETF, alongside their Spot Bitcoin ETF, has surged. This heightened attention has made the ETF issuer a prime target for scammers aiming to exploit the growing enthusiasm for crypto investments.

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