Ethereum (ETH): ETHPoW victim of an attack!

The Merge is the operation behind the move from proof-of-work (PoW) to proof of stake (PoS) for the Ethereum network. Also called the Merger, this operation dates from September 15, 2022. In the lead up to it, there was already no doubt that the merger could affect the cryptocurrency ecosystem. Specifically, the Ethereum blockchain risked losing some investor confidence if it failed. The risk of scammers looking to take advantage of the confusion surrounding the Ethereum merger was to be expected. Merger-related scams raised $1.2 million worth of Ether shortly before, during, and after the September 15 merger. These scams briefly became the dominant scam type in the Ethereum ecosystem. Let’s examine this trend in more detail.

The Fusion Scam Explained

Most Fusion scams work the same way as the classic trust exchange scam. The fraudster asks his victims to send them a certain amount of cryptocurrency 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 upgrade to the new Ethereum blockchain and receive funds in return.

September saw massive spikes in merger day scam revenue, the vast majority of which went to merger scams. In practical terms, merger scams supplanted virtually all other Ethereum scam activity on merge day. The collection amounts to more than $905,000 of ETH on September 15, compared to just under $74,000 for all other ETH-related scams. However, this activity dissipated as quickly as it appeared. Indeed, with scam activity returning to normal levels within days, and merger-related scams having all but disappeared by the end of September.

The recurrences in this type of scam

First, with the big DeFi hacks making headlines lately, it can be easy to forget that scamming is and will likely remain the biggest form of cryptocurrency crime. This type of scam is obviously particularly detrimental to cryptocurrency adoption because of the way scammers prey on user trust. Periods of major change for the blockchain industry such as the merger are a boon for fraudsters. Indeed, the confusion and lack of knowledge related to a particular event can be exploited by certain actors.

The scam peak on the day of the Ethereum Merger – Source: Chainalysis

First, it’s worth noting that merger scams are more likely than others to target users from countries with large GDPs. It is possible that the targets of Merge scammers are deliberately users in wealthier countries assuming that they would be more likely to invest more in the scam.

Surprisingly, 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 the Merge mean to them, as well as common types of scams to avoid in general.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential Tremplin.io!

Similar Posts