Furthermore, it should be mentioned that the Merge was carried out under the pretense of upgrading to ETH 2.0 or obtaining ETH via the proof-of-work chain.
On September 15, 2022, six weeks after the Ethereum Merge, there were almost $905,000 more scams than frauds. This once more called attention to the growth in fraud and market instability. There was concern at the time of the Ethereum Merge that there would be two Ethereum tokens, one for the newer Proof-of-Stake (PoS) blockchain and the other for the more traditional Proof-of-Work (PoW) blockchain. Scammers fully exploited this ambiguity.
The naive retail user was the intended victim, and the most typical tactic used was to instruct victims to pay the con artists some bitcoin in exchange for more, according to Rajagopal Menon, vice president of WazirX, a business that operates a cryptocurrency exchange.
It should be added that this was done under the guise of upgrading to ETH2.0 or obtaining ETH via the PoW chain. Surprisingly, on September 15, frauds involving the Merge had an 83% success rate, and 100% on a number of other days before and after the Merge, according to Chainalysis.
The potential of Ethereum 2.0 has also been questioned as a result of this. “Block creation will be centralized, but block validation will continue to be mostly distributed. Users may lose faith in the platform as a result and the Ethereum Foundation may become more powerfully centralized, according to Robert Balazs, co-founder, and CEO of cryptocurrency exchange ByteX.
Chainalysis also found that countries that participated in both Merge and non-Merge frauds more frequently than the average country. This group includes both India and the United States. Edul Patel, CEO, and co-founder of Mudrex, believes that the cryptocurrency sector should educate investors and draw lessons from the rise in Ethereum frauds.
Additionally, according to cryptocurrency express, a group of individuals who used the names and pictures of well-known Ethereum community members to create fake accounts on social media and forums committed the scams. Sayan Roy, the co-founder of ByteX, said: “They later used these accounts to promote a fake version of the Ethereum 2.0 protocol, which would have resulted in the loss of funds for anyone who participated.”
