Crypto scammers are posing as BlackRock officials, company warns

BlackRock, known as the world’s largest asset manager, has issued a warning about crypto scammers posing as company officials. This comes amid a wave of recent hacks targeting several crypto projects including LiFi, WazirX, dYdX, Fractal ID and MonoSwap, putting the industry globally on high alert. BlackRock was reported to have held assets worth $10.5 trillion in the first quarter of 2024, between January and March this year.

The company, headquartered in New York City, US, published a official blog post as a warning to the crypto investor community on July 29. The company has claimed that there has been a significant spike in crypto-related investment fraud and that criminals are misusing BlackRock’s identity to contact their targets.

“Scams are becoming increasingly sophisticated, and fraudsters often use names of well-known companies, such as BlackRock, to gain credibility and appear legitimate,” the company said in its blog post, which further highlights the tactics most commonly exploited by hackers.

Fraud Trends Observed by BlackRock

Scammers are flocking to crypto for two reasons: volatile prices and the privacy of transactions it offers. According to BlackRock, phishing websites, fake email addresses, and fake documentation are just the tip of the iceberg when it comes to the methods crypto scammers use to lure victims into their traps.

In investment fraud, fraudsters often use limited-time offers to pressure victims, allowing the lure of a significant reward to overshadow their better judgment. The asset management firm noted that crypto fraudsters “use social engineering techniques (e.g., manipulation, influence) to obtain confidential or personal information, use real employee names that match those on websites of regulators or senior executives, and abuse social networking platforms to reach large audiences” to facilitate their criminal agenda.

“The fraudsters are trying to convince you to invest in something that doesn’t exist or is worthless. They may contact you randomly or after you search for a specific investment, entering your personal contact details,” BlackRock said. “Recent examples include fixed-rate bond scams offering guaranteed returns. We’ve seen several of these scams targeting various financial institutions, including BlackRock.”

Immunefi, a Web3 bug bounty platform, recently announced a report which claimed that in the second quarter of 2024 – between April and June – crypto fraud increased by 91 percent compared to the second quarter of 2023. The report said that the crypto industry lost $509 million (approximately Rs. 4,261 crore) to fraud and scams in 2024 Q2.

These statistics highlight the growing threat of crypto fraud within the sector. BlackRock’s urgent warning underscores the seriousness of the situation.

Identifying Red Flags

The asset management firm, which led the listing of Bitcoin ETFs in the US in January, has listed some key warning signs that the crypto community should look out for to avoid falling victim to common scam tactics.

“Fraudsters spend time researching their victims and often have more information about them than we think. They can come across as charming, understanding, knowledgeable and persuasive. They exploit an individual’s instinctive willingness to trust and use this to build a bond,” BlackRock’s statement said.

Fraudsters often reveal their true nature through poor spelling and grammar when posing as reputable companies or their officials. BlackRock has also warned of schemes that promise returns that seem too good to be true.

Payment requests, emails from free webmail services or domains with subtle differences, time-limited offers, and frequent changes in email domains are some of the warning signs that crypto owners can use to protect themselves from scammers.