XRP Impersonation: Sham BlackRock Filing Under Investigation by Delaware DOJ

A recent event in Delaware has sparked concerns regarding the susceptibility of the trust registration process within the state, potentially opening avenues for fraudulent activities. The Department of Justice in the state is reportedly investigating a false submission that hinted at BlackRock, a prominent asset management company, gearing up for the introduction of a spot XRP exchange-traded fund (ETF).

The dubious submission, still visible on the Delaware Department of State's Division of Corporations website as of 2:30 p.m. ET on Tuesday, closely mirrored legitimate documentation filed by BlackRock the preceding week for its iShares Ethereum Trust product. This legitimate filing coincided with the company's application for a spot ether ETF with U.S. regulators.

The impact of the fraudulent XRP filing was significant, leading to a more than 10% surge in the token's value before a BlackRock spokesperson clarified to Bitsday that the company had no plans to launch such a fund. Subsequently, the incident has prompted an inquiry by the Delaware Department of Justice.

A representative from the Delaware Department of State informed Bitsday on Tuesday that the matter had been forwarded to the state's Department of Justice, providing limited information on the ongoing investigation. However, the Department of Justice did not immediately respond to requests for comments.

Concerns have emerged regarding the simplicity with which individuals or entities can falsely register a trust, raising questions about the effectiveness of the verification process. The Delaware website delineates seven steps necessary for establishing a new business entity, all seemingly achievable through the completion of interactive PDF forms online.

A pivotal requirement in this process is securing a registered agent in the State of Delaware, who can be either a resident or a business entity authorized to conduct operations in the state. However, apprehensions have been expressed about the straightforwardness of the requirements, as it seems that only a name and address are obligatory. This raises the potential for malicious actors to replicate information from authentic filings. In this specific case, the imposter appeared to have done no more than copy and paste details of the registered agent, Daniel Schwieger, a managing director at BlackRock according to his LinkedIn profile, from the legitimate filing.

This incident emphasizes the critical need for robust verification measures in trust registration to prevent fraudulent activities and uphold the integrity of the financial system. As authorities delve into the matter, a reassessment and potential enhancement of the existing registration processes may be necessary to fortify against similar incidents in the future.

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