Cyberattack Risks for BlackRock's Bitcoin ETF IBIT

The world's largest Bitcoin ETF, BlackRock's IBIT, could become a target for cyberattacks. The founder of OneKey has warned of a potential threat from North Korean hackers.

Key Risks

The IBIT fund manages assets worth approximately $63 billion, equivalent to roughly 815,000 BTC. Most of these cryptocurrencies are held by custodian Coinbase. The threat lies not in hacking private keys, but in gaining control over the transaction signing infrastructure to withdraw funds.

Potential Damages and Insurance Coverage

• A $6 billion theft would mean a loss of 9.5% of the fund's assets, or about $4 per share.
• BlackRock does not purchase separate insurance for the fund's bitcoins.
• Coinbase has $320 million in insurance coverage that applies to all clients.

In the event of unrecovered stolen BTC and insufficient insurance compensation, financial losses would be borne by IBIT investors. The concentration of massive bitcoin volumes among a limited number of custodians makes them more attractive targets for cybercriminals.