BlackRock clearly wants to take crypto seriously. Too bad it’s forever silly.

Ethereum, not even once.

BlackRock has learned the hard way just how silly “crypto” can be in comparison to Bitcoin.

Working with digital assets was a breeze when all BlackRock’s fund managers had to do was max bid bitcoin on Coinbase Pro on behalf of ETF shareholders.

But Larry Fink (or whomever else in charge of BlackRock’s crypto adventures) threw a spanner in the works when they opted to launch a $100-million money market fund that exists entirely on Ethereum.

It took only minutes for Crypto Twitter™ to name an Ethereum address tied to the fund, and even less time for the wallet to be drowned in low-quality memecoins and NFTs, most of which are valued at zero.

While there is indeed $100 million USDC in BlackRock’s suspected Ethereum wallet, which aligns with its SEC filing, there’s now more — 100 other cryptocurrencies, definitely not purchased by BlackRock, sitting alongside those stablecoins. There’s tokens like Jesus Coin, Cramer Coin, HarryPotterObamaSonic10Inu, Lery Fenk and DERANGED, and also some more offensive stuff that likely won’t get past my editor (for good reason).

Altogether, the tokens with more than zero value contribute an additional $84,000 to the fund’s portfolio. NFTs like CryptoDickbutts and KaijuKingz and goblintown add another $5,000 in value. 

Think of those contributions as guerilla marketing spend for micro-cap crypto projects: BlackRock’s Etheruem address is destined to be watched like a hawk to see how it trades crypto markets. Etherscan then doubles as a billboard for all sorts of wacky clown shows.

It’s not as though BlackRock should feel special that it’s targeted for such financially nihilistic trolling. Practically every public figure in crypto gets the same treatment. 

Brian Armstrong’s Ethereum address contains nonsense like Unicorn Candy Coin and Make Trump President Again — tokens that he had no hand in acquiring himself. 

Vitalik Buterin’s most well-known wallet contains nearly 2,000 tokens, most of them worthless, as well as more than 67,000 NFTs thrown in his direction (although there is that whole shiba inu saga which culminated in Buterin burning and donating hundred of trillions of tokens sent in his direction, worth hundreds of millions of dollars).

Shitcoins mixed up with legitimate USDC aside, BlackRock’s boffins have now been forced to deal with novel legal headaches on account of their Ethereum endeavor.

One plucky prankster tainted BlackRock’s reported wallet with 1 ETH ($3,350) washed and sent through sanctioned crypto mixer Tornado Cash.

Read more from our opinion section: Slerf investor or not, no one deserves to lose money in crypto

It’s been illegal for US citizens to interact with Tornado Cash since the Department of Treasury’s Office of Foreign Assets Control (OFAC) added the smart contract protocol to its blacklist in August 2022. The mixer made the blacklist on account of its suspected usage by North Korea-linked Lazarus Group to wash stolen crypto, often coming from high profile hacks like the $625 million Ronin bridge attack two years ago.

The BlackRock deposit in question mirrors a spate of dust attacks after the 2022 sanction, targeting Ethereum addresses linked to celebrities including Armstrong, Jimmy Fallon, Steve Aoki and Logan Paul.

All this probably isn’t what Fink was thinking of when he was hyping tokenization

The string of deposits to those addresses directly from Tornado Cash is considered something of a political protest — both pointing out the absurdity of sanctioning a permissionless protocol and highlighting the impossibility of enforcing restrictions on fungible cryptocurrencies that may have at one point touched crypto mixers.

Is BlackRock now at risk of itself being sanctioned by OFAC for holding ether washed by an illegal protocol? It doesn’t take a law degree to figure out that’s highly unlikely.

Now, BlackRock presumably has accountants and legal departments combing through the legalities of holding CYBONK and harrypottertrumphomersimpson777inu, as well as ETH of dubious origin, all in the same wallet as proper investor funds.

Should’ve just stuck with bitcoin.

Updated Mar. 22, 2024 at 2:20 pm ET: An earlier version incorrectly stated it was possible to block incoming transactions from sanctioned addresses. That’s not possible.

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