The merger is the operation underlying the transition from proof-of-work (PoW) to proof of stake (PoS) for the Ethereum network. Also known as the Merger, this operation begins on 15 September 2022. In view of this, there was already no doubt that the merger could affect the cryptocurrency ecosystem. In particular, the Ethereum blockchain risked losing some investor confidence in the event of bankruptcy. The risk of scammers trying to take advantage of the confusion surrounding the Ethereum merger that was to be expected. The merger-related scams raised $ 1.2 million worth of Ether just before, during and after the September 15 merger. These scams briefly became the dominant type of scam in the Ethereum ecosystem. Let’s look at this trend in more detail.
The merger scam explained
Most Fusion scams work the same way as the classic trust swap scam. The scammer asks his victims to send them a certain amount of cryptocurrency in order to receive more in return (usually double the victim’s initial payment). To gain the victim’s trust, the scammer often poses as a celebrity. In our case, the scammers explained to the victims that they had to send cryptocurrency to switch to the new Ethereum blockchain and receive funds in return.
September saw huge spikes in merger-day scam revenue, the vast majority of which went to merger scams. In practical terms, the merger scams supplanted virtually all other Ethereum scam activities on the day of the merger. The collection totals over $ 905,000 worth of ETH on Sept. 15, compared to just under $ 74,000 for all other ETH-related scams. However, this activity dissipated as quickly as it appeared. In fact, with scam activity returning to normal levels within days and merger-related scams almost disappeared by the end of September.
The occurrences in this type of scam
First, with the big DeFi hacks making headlines lately, it can be easy to forget that scam is and likely will remain the largest form of cryptocurrency crime. This type of scam is obviously particularly bad for cryptocurrency adoption due to the way scammers exploit user trust. Periods of big change for the blockchain industry such as merger are a boon to scammers. Indeed, confusion and lack of knowledge relating to a particular event can be exploited by some actors.
First, it’s worth noting that other merger scams are more likely to target users from high GDP countries. It is possible that Merge scammers’ targets are deliberately users in richer countries assuming they would be more likely to invest more in the scam.
Surprisingly, the merger scams had an 83% success rate on September 15, the day of the merger, and a 100% success rate several other days before and after the merger. The spike in merger-related scams makes it clear that the industry needs to focus on educating users about what certain events like merging mean to them, as well as common types of scams to avoid in general.
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To the angelism of the intercessors of the current monetary system I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.