BlackRock, renowned as the world’s largest asset management firm, has issued a warning about crypto scammers impersonating its company officials. This comes amid a wave of recent hacks targeting various crypto projects, including LiFi, WazirX, dYdX, Fractal ID, and MonoSwap, putting the industry on high alert globally. BlackRock reportedly held custody of assets worth $10.5 trillion in the first quarter of 2024, between January and March this year.

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

“Scams are becoming increasingly sophisticated, and fraudsters will often use names of well-known companies, like BlackRock, to gain credibility and appear legitimate,” the firm said in its blog post, further highlighting the tactics that are being exploited most by hackers.

Scam Trends Observed by BlackRock

Scammers are flocking to crypto because of two reasons – volatile pricing and the privacy of transactions that it offers. According to BlackRock, phishing websites, fake email addresses, and counterfeit 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 scams, fraudsters often use limited-time offers to pressure victims, making the lure of a substantial reward overshadow their better judgment. The asset management firm noted that crypto scammers are, “using social engineering techniques (e.g., manipulation, influencing) to extract confidential or personal information, using genuine names of employees that match those on regulators’ websites or senior executives, and exploiting social networking platforms to target large audiences,” to facilitate their criminal agenda.

“The fraudsters try to convince you to invest in something that either does not exist or is worthless. They may contact you out of the blue or after you have searched for a specific investment, where you enter your personal contact details,” BlackRock said. “Recent examples include fixed rate bond scams offering guaranteed returns. We have seen several of these targeting different financial institutions, including BlackRock.”

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

These statistics underscore a growing threat of crypto scams within the sector, and BlackRock’s urgent warning highlights the seriousness of the situation.

Identifying Red Flags

The asset management firm, which spearheaded the listing of Bitcoin ETFs in the US this January, has outlined key red flags that the crypto community should be aware of 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 be charming, understanding, appear knowledgeable and persuasive. They take advantage of an individual’s instinctive willingness to trust and use this to build a rapport,” BlackRock’s post noted.

Scammers often reveal their true nature through poor spelling and grammar when impersonating reputable companies or their officials. BlackRock has also cautioned against schemes promising returns that seem too good to be true.

Payment requests, emails from free webmail services or domains with subtle differences, time-bound offers, and frequent changes in email domains are among the warning signs that can help crypto holders protect themselves from scammers.