Blockchain analysis firm Chainalysis says scam artists stole $1.2 million worth of Ethereum (ETH) during the project’s merge to proof-of-stake.
The firm notes in a new blog post that merge-related scams took in the haul shortly before, during and after the September 15th event.
The merge scams resembled other classic frauds, explains Chainalysis.
“Most Merge scams functioned similarly to the classic trust trade scam, in which the fraudster tells victims to send them some amount of cryptocurrency to receive more in return (typically double the victim’s initial payment), often impersonating celebrities to do so. In this case, scammers told victims they should send in cryptocurrency in order to “upgrade” to the new Ethereum blockchain and receive funds in return.”
The firm notes merge-related scams had an 83% success rate on September 15th and a 100% success rate on some of the days surrounding the event. The US and India engaged with this specific type of fraud more than any other countries.
“Looking at all the countries in our dataset, it is interesting to note that Merge scams were more likely than non-Merge scams to target users in countries with higher GDPs [gross domestic products], by a small but noticeable margin. It’s possible that Merge scammers purposely targeted users in wealthier countries under the assumption they’d be more likely to invest more in the scam, but it’s unclear why Merge scammers would be more likely to do this (or do it successfully) than other scammers in the Ethereum ecosystem.”
Chainalysis says that times of industry change can be ripe for fraudsters looking to capitalize on potential investor confusion. The firm claims “the spike in Merge-related scamming makes clear that the industry must work to educate users on what things like the Merge mean for them, as well as which common scam types to avoid generally.”
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