In a recent and unexpected turn of events, the cryptocurrency market experienced a significant shake-up due to a fraudulent filing for a BlackRock XRP Trust.
Bloomberg analyst Eric Balchunas confirmed the inauthenticity of the filing, which led to a dramatic 15% rise and fall in the price of XRP.
This is false! Confirmed by BlackRock by me. Some whacko must have added using BlackRock executive name etc. Cmon man. pic.twitter.com/cDpnycYwjQ
— Eric Balchunas (@EricBalchunas) November 13, 2023
The Ripple effect of a fraudulent filing
The root of this market turmoil can be traced back to a filing that appeared on the Delaware Department of State’s Division of Corporations website. This filing, erroneously attributed to BlackRock, an American multinational investment management corporation, was for an “iShares XRP Trust.”
The announcement that BlackRock might invest in XRP caused a rapid and substantial increase in cryptocurrency values, climbing over 15% in just an hour. Sadly, this surge of enthusiasm was brief. As the truth surfaced about the dubious nature of the filing, the price of XRP plummeted back to its original level.
This incident consequently brings to light an essential question: How could such a significant market movement be triggered based on unverified information, and what does this say about the current state of cryptocurrency markets?
Investigating the source of the filing
A Bloomberg analyst, Eric Balchunas, confirmed that the filing was a sham, citing a source from within BlackRock. Although listed on the Delaware website, the filing was not initiated by BlackRock. The question that baffles many is: who is behind this impersonation, and what was their motive?
“It’s bizarre stuff; the real issue is, Who the hell is pretending to be BLK and registering legal names?”
Additionally, Brad Garlinghouse, the CEO of Ripple, expressed his frustration with YouTube, questioning their vigilance in monitoring such fraudulent content. He reminded the public to be cautious and only trust information from official Ripple accounts.
“There’s been an uptick in deepfake scam videos (ex. below) overlaying new words with old video footage from Ripple’s events (@YouTube, are you asleep at the wheel again?!). Reminder: don’t trust; verify (all approved messaging will only come from official Ripple accounts).”
On the flip side, a Delaware Department of State representative declined to comment on the matter, leaving a cloud of mystery over how the fraudulent BlackRock name ended up on the official website. This incident not only casts a shadow over the credibility of information sources but also underscores the vulnerability of the crypto market to news-based volatility.
Market reaction and future implications
The XRP price, which had briefly soared to $0.75, settled back to $0.62, with trading volumes spiking by 250% in the aftermath. Although not uncommon in the crypto world, this price volatility was a stark reminder of the market’s sensitivity to news, especially when it involves significant players like BlackRock.
Interestingly, the same BlackRock contact name appeared on the fraudulent XRP and a legitimate Ether-based fund filing, adding another layer of intrigue to the scenario. This incident coincides with a broader market movement where Bitcoin also saw a significant rally, fueled by anticipation of a U.S. SEC-approved spot Bitcoin ETF.