As Ethereum ETFs debut, Europol warns of scammers and other risks

The emergence of bitcoin (BTC) and crypto exchange-traded funds (ETFs) might be exploited by scammers, and the operators of these funds are becoming targets themselves, Europol has warned.

In their latest Internet Organised Crime Threat Assessment, Europol, or the European Union Agency for Law Enforcement Cooperation, stated that as ETFs might increase the adoption of BTC, scammers, in turn, might target inexperienced individuals with ETF-related fraudulent schemes.

Moreover, according to the report, ETF operators might become valuable targets for fraudsters as these companies, directly or via third parties, hold billions in crypto assets.

For example, BTC ETFs in the US, which debuted this past January, amassed $17 billion in BTC.

Meanwhile, yesterday, Ethereum (ETH) ETFs also hit the market in the US, registering $107 million in inflows on the first day.

ETFs are a very popular investment vehicle in the US. Our previous report explains them in more detail.

Europol also warned that cybercriminals could exploit the Ordinals protocol, launched in 2023, which helps Bitcoin users create non-fungible tokens (NFTs) on the blockchain. However, the authors did not specify how.

In either case, the report noted that BTC still dominates among criminals, although the usage of altcoins is on the rise.

“Ransomware operators mostly ask for Bitcoin when demanding ransom, as these are still easier to obtain than other types of coins,” Europol said, noting that as altcoins, such as Monero (XMR), grow in popularity, the number of cases supported by Europol involving only BTC were almost equal to those involving altcoins.

The authors of the report also stressed that in investment fraud, BTC is increasingly being converted to stablecoins to address BTC's price volatility issues.

However, the largest stablecoin operators, such as Tether and Circle, can freeze their user accounts at the request of law enforcement.