Over seven weeks have passed since Ethereum made the historic switch from the energy-guzzling proof-of-work consensus algorithm to the more environmentally friendly proof-of-stake consensus mechanism.
The result of this eagerly anticipated merger is still uncertain. Since September 15th, the gas fees have not significantly decreased, and ETH has been trading in a range.
Recent research by the blockchain analytics company Chainalysis looks more closely at the transition’s immediate aftermath. The article describes the “merge frauds” that occurred just before Ethereum underwent its shift.
Scammers Took Advantage
In a merge scam, a con artist solicits contributions from unaware users under the promise of rewarding them with a freshly minted token worth twice as much.
Scammers took advantage of Ethereum’s Merge to trick victims into sending cryptocurrency in exchange for an upgrade to the PoS Ethereum version.
According to research conducted by Chainalysis, from September 14 to September 16, merge scams were more prevalent than other frauds that are typically encountered in the cryptocurrency field.
Scammers made nearly $900,000 on the day of the switch while only making $74,000 from other ether-related scams. Scammers used merging schemes to defraud victims out of more than $1.2 million.
The research concluded that it was “impossible not to generate money if you were running a reasonably decent Merge scam on and around September 15,” according to the data.
On September 15, scammers had a 100% success rate due to the public’s ignorance and lack of comprehension of this event. In the days that followed, the fraud success rate remained remarkably high.
Most Impacted Areas By Scammers
Users in dozens of countries were reportedly impacted by merging scams, as per Chainalysis. India and the United States were among the most severely affected countries.
However, data indicate that they are less prone to engage in non-merge scams. Nevertheless, nations like the United Kingdom and Germany were also victims of these scams.
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The nations least impacted by these scams included Hong Kong, Singapore, and Japan. Curiously, non-merge scam activity was also noticeably lower in these nations.
Before Ethereum’s switchover, a number of significant cryptocurrency exchanges and wallets, including Coinbase, issued warnings to their users about the likelihood of such schemes preying on unwary consumers.