The Delaware Department of Justice is investigating a fraudulent XRP exchange-traded fund (ETF) filing that falsely suggested an association with BlackRock Inc (NYSE:BLK). This misleading filing led to a temporary increase in the value of XRP, a cryptocurrency that has been subject to significant legal scrutiny in recent times.
The bogus ETF application on Monday mimicked official documents of BlackRock's authentic iShares Ethereum Trust, sowing confusion and prompting a brief surge in XRP's price by nearly 13%. The false information was circulated via social media, causing the price of XRP to jump from $0.65 to $0.75 before the claims were refuted and the price settled at around $0.63.
BlackRock, which oversees more than $8 trillion in assets and has previously filed for Bitcoin and Ethereum ETFs, quickly denied any involvement with the XRP filing. A spokesperson for the company stressed that the paperwork related to the fraudulent filing was not legitimate.
The investigation into this incident revealed that the fraudulent application was easily submitted through an interactive PDF form on the Delaware Department of State's website, requiring only a registered agent in Delaware. The fraudster had copied details from BlackRock director Daniel Schwieger's LinkedIn profile.
This event comes at a time when the SEC has been inundated with Ether futures ETF applications, receiving 11 in just one week. It also follows Ripple's victory in a landmark lawsuit with the SEC, which had previously led to stability in XRP's price.
Market analysts have compared this situation to previous pump-and-dump schemes, such as the Walmart-Litecoin fiasco. The Delaware Department of State confirmed that they referred the case to the Justice Department for further investigation.
The state department spokesperson emphasized Delaware's commitment to providing clarity on this matter as investors and market watchers await further developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.