It seems that the usual fraudsters of the cryptocurrency space are looking to deceive new users by exploiting the excitement of users regarding the Ethereum network Merge update, which is likely to take place tomorrow morning.
To Report Cointelegraph, the Ethereum Marge update is scheduled to happen in less than 24 hours. According to Steve Bassi, founder of PolySwam, these scams can come in the form of fake Ethereum 2.0 (ETH 2.0) tokens, fake Ethereum staking pools, and bogus airdrops.
Palliswam itself is a decentralized cyber security marketplace that connects cyber security experts to various companies and projects.
Fraudulent investment pools
As the Ethereum network updates in the next 24 hours, the Ethereum network’s proof-of-work consensus mechanism will change to proof-of-stake. Basi says that since staking Ethereum independently requires at least 32 Ether units, for a large portion of users, using staking pools is the only way to profit from participation in the Ethereum blockchain.
He says about this:
Staking is a completely new concept for a significant part of the cryptocurrency community, and if you don’t have at least 32 unused Ethereum units, you have no choice but to join one of the cryptocurrency’s staking pools in order to profit from participating in the validation of the Ethereum network.
Bassey, however, warned that crowdfunding platforms are exposing themselves to some risk, as they usually require users to deposit their Ethereums outside of their wallets and give them to the providers of these services.
Basi said that those platforms that offer the possibility of Ethereum crowdfunding, which have just started to work and may offer very attractive conditions to their users, may seek to defraud and steal the assets of Ethereum holders.
This risk already exists between DeFi platforms, staking pools, and various tokens, but Marj gives fraudsters a new opportunity to operate.
Another threat that will become more serious as we get closer to the Ethereum Marj update are scammers asking new users to sign a malicious smart contract under the pretense of “migrating to a new network” or somehow hand over their wallet’s private key (or recovery phrase). Enter in a fake program.
Basi emphasized that the Ethereum upgrade is done completely transparently, and users do not need to do anything to transfer to the new network or keep their Ethereum.
The founder of Palliswam said:
We may continue to see some scammers trying to get users to sign fraudulent transactions or provide their wallet private keys, under the false pretense that they need to do something special to migrate to the new version of the Ethereum blockchain.
Another method of attacking holders is bogus airdrops, which Bassey says scammers use to convince users to sign a transaction or visit a phishing site.
Marj Ethereum is a good excuse for scammers to give their airdrops the appearance of a well-known and economically valuable project. These bogus airdrops are likely to direct users to phishing websites that will use them to capture Ethereum holders, their private keys, or trick them into signing a bogus transaction.
The Ethereum Foundation is calling Marj “the most important update in Ethereum’s history” and has asked users to be on the lookout for scams trying to exploit them during this upgrade. The foundation has repeatedly warned that there is no such thing as “ETH2” or a separate digital currency called “ETH 2.0”.
Most people expect tomorrow’s Marj update to be a success, given the previous Ethereum to Proof-of-Stake transition tests. However, Bassey says there may still be ways hackers can game the network.
CEO Palliswam has said in this regard:
We really don’t know if a group of hackers or fraudsters have discovered a DDoS attack method to use against the Ethereum network after the blockchain update; But if such an attack is in the works, it will likely only temporarily affect the Ethereum network, and there are plenty of keen eyes in the market to check the performance of the network post-Maraj. Of course, attackers also seek to use every possible opportunity.