Nov 14, 2023

A fake filing that suggested asset manager BlackRock was attempting to launch an XRP ETF on Monday sent the price of XRP higher by more than 10% before the token gave back those gains.

Video transcript

The State of crypto is presented by Tron connecting the world to the power of Cryptocurrency. All right, while Bitcoin and Ether remain relatively unchanged this morning, Xrp went on a roller coaster ride after a fake filing suggested that Blackrock was attempting to launch an XRP ETF yesterday. This sent XRP higher by more than 10% before the token gave back those gains. Joining us now to discuss Coin desk, global policy and regulation. Managing editor Nick Day who is also the editor of coin desks state of crypto newsletter, Nick. Good morning. Good morning. All right. What happened here? The news started circulating on social media yesterday. A Black Rock spokesperson said the regulatory filing was bogus explain how all of this started and how it unfolded. Yeah. So around a quarter to 4 p.m. yesterday Eastern, uh people started talking about this uh Delaware corporate entity that had been filed called the Blackrock XRP Trust. Um So one thing that, you know, I we don't really talk about when we're talking about the crypto ETF applications is uh you know, sometimes before you get to, you know, NASDAQ or the, you know, NYS er exchange or uh you know, CBOE BC X, you have a Delaware corporate entity file for. Um this is just kind of the company saying here's this vehicle that's going to be a thing. And so with Blackrock, we saw the Ishares Bitcoin Trust and the Ishares Ethereum Trust, uh get filed in Delaware under the Delaware division of corporations. Uh you know, shortly before the company filed the actual or their exchange partner, NASDAQ filed the actual, uh, you know, fighting before form that goes to the securities and exchange commission saying, hey, we want to launch this crypto ETF and here's our application. So when this ishares XRP trust filing came out yesterday, uh, you know, I think people's first response was, uh, does this suggest Blackrock intends to launch a XRP Exchange traded fund? And, um, you know, XRP has a number of differences from Bitcoin and Ether. Uh, you know, ranging from the fact that it is the subject of current litigation with the and Exchange Commission to the fact that Bitcoin and Ether have these kind of massive regulated futures markets that Blackrock and other applicants are pointing to as reasons for approving a Bitcoin and Ether ETF. So, you know, there's, I think a lot of skepticism as well that this XRP filing was real and, you know, it need, it turned out, you know, in less than an hour, Blackrock was able to confirm that this was, uh, you know, in the spokesperson's words, false it was not a real filing and it was just someone had filed uh with the same public registered agent information as the ether and filing and, you know, that took us to about 445. T one of those things happened before this. This sounds vaguely familiar. Didn't we have a fake filing of uh a couple of years ago from what I recall? Yeah, we had a, a few back in 2021. So Freescale, a sub of Bitcoin Dispar Digital Princy Group uh has these uh crypto trust projects, right? People can invest in them. Um Usually they do the same thing where they file the ST corporate entity first before they, you know, go towards the process of watching uh and listing shares of this thing. So there were a couple of filings made for tokens back in 21 that again, you know, did not have, you know, were not made by the actual company Grey Scale were not made by, you know, anyone associated with the company. Uh uh you know, it was not an official filing, it was not intended to uh you know, those products were not real products, but, you know, they were seeing a lot of interest in, you know, there is a hype on a pair of tokens that otherwise, you know, might not have had those, you know, whatever price movements might have happened. And once again, it was the Delaware corporate entity filings that led to the situation, Nick, you just mentioned there. It's not the first time that this has happened. What made this filing look so real? There were some media organizations that were fooled, some ETF watchers that were also fooled by this. Did it? What markers did it have that made people think like this is the real deal. Well, you're not getting a lot of information with these corporate filings and uh a lot of division of corporations website, right? You get the name of the product, the identification number for that, you know, Delaware's division of corporation signs, you have registered Asian information, which is just the name and address, uh the code, etcetera, but there's really not much more information there beyond the name. And uh you know, anyone can put in the name of a registered agent. So in this case, it's the managing director at Blackrock whose name was basically copied over from the Ethereum filing. Uh not the Bitcoin filing that one has slightly different information. Uh But the the filing had, you know, the same agent information, et cetera. Uh I think, you know, based on I I was going through the website last night, you can buy certain records that are not immediately published, but they also don't contain the original uh copies of, you know, whatever someone used to file. So, you know, as far as I can tell, based on like just what's publicly available, you really can't tell like you have to, you know, either guess or hope that it was filed by the person who claimed to have filed it. Uh, but you can't really tell for sure. You can't see the original documents, you can't see the signatures or whatever. You can't see the email address that it might have been submitted by. Um, you can't really tell whether or not it is legitimate until you see confirmation or review from somewhere else. Can, can anything happen to, uh, folks who do such a dastardly deed? Yeah, it's a good question. Um It's one that we were briefly looking at in 2021 and clearly we have to pick that up again because as far as I know, uh you know, not necessarily, but I that's, you know, we have not really got much information one way or another on that Nick quickly before we go. Let's talk about some real filings. Blackrock previously filed with the SCC to launch a spot, Bitcoin and Ether ETF uh any updates on the status of those, you know, I think, uh ETF Watchers as you mentioned before are looking to, you know, this week, potentially for any news. Uh We're in a weird window where a lot of the applications are not currently in the middle of an active comment period. And so the sec could hypothetically decide to make, you know, take action on a number of these filings at once. Um It still seems like January is a more likely uh time frame uh for us to see kind of, you know, answers and results from these applications. But uh you know, people give you an eye out just in case there's any tea leaves that might hint one way or another towards whether the ETF applications will be approved or denied. All right, Nick, we're going to leave it there. Thanks so much for joining us and sharing the reporting this morning and we'll see you tomorrow. Everyone that was Coin Desk, Global policy and regulation, managing editor Nick Day and don't forget to sign up for the state of crypto newsletter on coindesk dot com.

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