BlackRock warns of rise in crypto scammers

BlackRock, the New York-based asset manager, has issued a warning about a growing number of crypto scammers targeting investors in its iShares spot Bitcoin and Ether Exchange-Traded Funds (ETF).

The firm urges investors to avoid any social media interactions with individuals or companies posing as BlackRock representatives.

Spike in investment-related scams

According to BlackRock, these scammers lure victims by offering training or investments via social media platforms such as WhatsApp and Telegram. The warning states: “There has been a spike in investment-related scams, including directing users to crypto investment-related websites and/or social media platforms.”

BlackRock emphasizes that it never contacts users on social media to demand payments or offer investments. BlackRock’s iShares Bitcoin Trust (IBIT) has attracted $19.7 billion in Bitcoin since its launch on Jan. 11, making it the leader in terms of total inflows, with more assets under management than all other approved U.S. spot BTC ETF providers combined.

Robert Mitchnick, BlackRock’s head of digital assets, noted that there is “very little interest” from clients in cryptocurrencies other than Bitcoin and Ethereum. Speaking at the Bitcoin 2024 conference in Nashville, Tennessee, he said, “Our client base today is overwhelmingly interested in Bitcoin, and then somewhat in ETH… and there’s very little interest outside of those two today.” Mitchnick expects investors to eventually allocate about 20% of their crypto holdings to ETH, with the rest going to Bitcoin.

Bitcoin is ‘digital gold’

BlackRock CEO Larry Fink recently revealed that he has changed his mind about Bitcoin and now considers it “digital gold” and a “legitimate” financial instrument. In an interview with CNBC’s Jim Cramer, he said: “It (Bitcoin) is a legitimate financial instrument that you can potentially earn non-correlated returns from.”

These warnings come amid growing interest and investment in Bitcoin and Ethereum, despite the risks of scams and fraud in the crypto space. BlackRock advises investors to remain vigilant and only use official communication channels for investment-related matters.