Scams and fraud are nothing new in the cryptocurrency industry. Last year $14bn was taken from unsuspecting investors, according to Chainalysis. But the upcoming Ethereum (ETH) merge is providing fraudsters with a new opportunity and the blockchain has taken note.
The Ethereum foundation said: “As we approach The Merge of Ethereum Mainnet, you should be on high alert for scams trying to take advantage of users during this transition.”
The second largest cryptocurrency is moving to a proof-of-stake (POS) consensus mechanism as it seeks to reduce energy usage, transaction speeds and gas fees.
This transition is set to take place between 13 and 15 September 2022, according to Ethereum’s co-founder, Vitalik Buterin. While there are benefits for Ethereum users, there are numerous fraud risks to be wary of.
The crypto industry is rife with fraud that is usually adaptive to new trends and takes advantage of sector-wide events.
For example, the rise of decentralised finance (DeFi) in 2021 led to new opportunities for fraudsters. DeFi fraud made up 72% of cryptocurrency thefts, according to Chainalysis.
Similarly, the explosion of non-fungible tokens (NFTs) into the mainstream gave bad actors new methods to take investors’ funds.
Chainalysis pointed to the use of wash trading, where NFT prices were manipulated to earn…
