It’s been a few weeks since Ethereum switched from a PoW consensus protocol to PoS – a more eco-friendly consensus mechanism. The long-anticipated event in the crypto industry is known as The Merge and was Ethereum’s first upgrade. The Merge significantly impacted the crypto ecosystem, as its purpose was to make the Ethereum network more scalable and energy efficient. Throughout time, Ethereum has proved reliable, and due to its features, it has become the 2nd leading cryptocurrency in the world. Since learning how to buy ethereum is simple, anyone can join the crypto market as long as they are financially and mentally prepared to invest in digital assets.
The crypto market is filled with many lucrative opportunities, and that’s one of the reasons that draws many people to it. But there’s still room for improvement within this new space, which is why Ethereum’s developers are working towards making the network much more efficient in terms of scalability, security and sustainability. But everything comes at a price, and while the Merge had many benefits for the crypto industry, it also led to a spike in scams, as fraudsters exploited the event to make millions.
Scammers made millions from merge scams
Scams follow wherever money is concerned, and that also applies to cryptocurrencies. In 2021 alone, thousands of people lost billions of dollars due to crypto scams. Younger consumers, in particular, engaged the most with these scams and ended up losing their crypto. Scammers don’t miss a chance to plan their next move, and the Merge opened the door to successful fraudulent activities, as it had all the ingredients that could help them grab a lot of money.
Merge scams are similar to the typical trust trade scam, in which scammers trick victims into sending them their crypto by promising to double the initial amount, often pretending to be famous personalities to achieve their purpose. Fraudsters asked victims to send their crypto to upgrade to Ethereum’s new version. Their tactic had an 84% success rate on the day the Merge occurred and was entirely successful on the days following the Merge. In fact, no other scams within the crypto space were as popular as merge scams. Scammers made $900,000 worth of ETH on the first day of the event alone and $1.2 million in total as they kept on tricking people. According to data, fraudsters only needed a decent scam to make money from the event, and it was all due to the lack of knowledge about what was happening.
What regions were most affected by merge-related scams?
Several countries were hit by merge-related scams, with India and the US being the most affected. While Germany and the UK are also on the list, data shows that users in these countries are generally less likely to engage with this type of scam. Asian countries such as Singapore, Japan and Hong Kong are at the bottom of the list of countries affected by merge scams, and this also has to do with the fact that people in these regions don’t usually fall victim to crypto scams. Why only particular countries engaged more with merge scams is a good question to ask in such a situation. One reason could be that some of the merge scams were created to target only specific countries, such as Finland, which engaged with these scams at a significant level. Another possible assumption is that merge scammers targeted people in wealthier countries, believing they would invest more in the scam.
Significant events like the Merge are great opportunities for scammers
Scamming is one of the most significant crypto-based crimes which can affect crypto adoption, as these fraudulent activities prey upon users’ trust. Unfortunately, during times of considerable change in the industry, bad actors are most successful with their tactics, and that’s because of the confusion around the event. The spike in Merge scams should be a warning for those in the crypto community who must educate themselves about what these events mean for bad actors and how to avoid falling victim to common scams. Here are some general rules for protecting your crypto:
It may sound like a cliché, but knowledge is power when it comes to the crypto space. The only way to keep your digital assets safe is to stay informed. It’s never wise to buy crypto unless you research factors like:
- The time the coin was created;
- The name of the coin’s developer;
- The technology behind the coin;
- The coin’s value and what features make it different from the rest.
By learning all these aspects about the crypto you want to buy, you won’t end up purchasing a currency developed for malicious purposes.
Don’t trust everyone on the Internet
The Internet is full of advice regarding crypto, but you should only trust those with financial credentials. Otherwise, you can easily fall victim to a scam. Thus, you should never take advice from random people on social platforms or celebrities, as they may not have the best intentions. For instance, fake crypto giveaways are one of the most common scams in the industry and involve fraudsters using fake identities to convince users to hand over their crypto funds.
Similarly, phishing scams look like coming from genuine companies, which is why it can be challenging to detect them. If you receive a suspicious email asking you to divulge personal information, remember to check the sender’s email address first. Don’t share your password and don’t open any links you get from someone you don’t know, and never share personal data.
Secure your crypto wallet
Suppose you store your virtual currencies in a crypto wallet. In that case, it’s vital to ensure a trustworthy company created your wallet. Avoid using public Wi-Fi when accessing your crypto wallet, and never divulge your login credentials to anyone. Two-factor authentication is also helpful because it ensures your wallet is safe even if your laptop or phone gets stolen. Another idea is to have multiple wallets or cold storage devices without an Internet connection, as this guarantees you won’t lose everything in case of a breach.
The bottom line
The merge scams are an unfortunate event in the crypto space, but people should take it as a wake-up call and be cautious about those things that seem too good to be true. Before investing in crypto, it’s essential to become familiar with the ins and outs of the market and do their best to avoid scams that could have devastating consequences.