Bitcoin ETFs Bleed $490 Million as BlackRock Faces Fraud Scandal

Core Insights - Major crypto ETFs experienced significant outflows, with a total of $672 million withdrawn on October 30, primarily driven by risk aversion among institutional investors [1][2][3] - BlackRock's private-credit arm is embroiled in a $500 million fraud scandal, raising concerns about risk management and due diligence within the firm [1][4] Group 1: ETF Outflows - Institutional clients withdrew $490 million from Bitcoin ETFs on October 30, with BlackRock's IBIT ETF leading the outflows at $290.9 million [2] - Ethereum ETFs also faced substantial losses, totaling $184 million, with BlackRock's ETHA accounting for $118 million of this amount [2][3] - The outflows are interpreted as profit-taking and portfolio trimming rather than panic selling, indicating a broader retreat from risk amid macroeconomic uncertainty [3] Group 2: Fraud Scandal - BlackRock's private-credit division, HPS Investment Partners, is linked to a telecom-financing fraud involving over $500 million, which included fake accounts receivable [4] - Court filings allege that borrowers used forged contracts and invoices from major companies like T-Mobile and Telstra as collateral for large loans, revealing systematic forgery and misrepresentation [5]