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3 Ways Scammers Will Try to Trick You into Ethereum Mergers

by SuperiorInvest

Fraudsters are likely to take advantage of the excitement surrounding the Ethereum Merge to launch new scams targeting new cryptocurrency users, warned PolySwam CEO Steve Bassi.

The Ethereum Merge is expected to happen within the next 24 hours.

In an interview with Cointelegraph, Steve Bassi, founder and CEO of PolySwarm, said that these scams can come in the form of fake ETH 2.0 tokens, fraudulent mining pools, and fake drops.

PolySwam is a decentralized cybersecurity marketplace that connects cybersecurity experts with projects and companies through rewards.

Underwater betting pools

Ethereum’s upgrade means a transition from the current proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS).

Bassi said that for many Ether (ETH) holders, joining the staking pool will be their only way to earn a return on staking rewards unless they have the 32 ETH needed to become an independent validator.

“Staking is a fairly new concept to most of the crypto community and if you don’t have 32 ETH you will need to join one of the staking pools to get a return on your ETH.”

However, Bassi warned that pooled betting providers “carry their own risk” as they often require users to deposit their ETH and relinquish control over it.

Bassi said start-up bookmakers who “can offer very attractive terms” could carry out a “sudden rug-pulling” that would affect pool participants.

“This risk exists today with DeFi platforms/pools and tokens, but the merger will give fraudsters a new universe to work with.”

Upgrade scam

One of the more immediate threats involves fraudsters trying to trick users into signing fraudulent transactions or parting with their private keys under the guise of migrating to the new Ethereum chain.

Bassi reiterated that the upgrade to proof-of-stake should be transparent and the user should not have to do anything to migrate or preserve their ETH-based tokens, noting:

“We will likely see fraudsters try to get users to sign fraudulent transactions and/or leak private keys under some false pretense that the user needs to do something to migrate the chains.”

Fake landings

Here comes another likely attack vector in the form of “false landings”, added by Bassi — persuading users to sign transaction messages or visit phishing sites in order to receive a fake drop.

“The ETH merger will be a good excuse for these scammers to pretend to be well-known, economically valuable projects promising landings.”

“These drops are likely to redirect users to phishing sites where they can be stripped of their ETH, private keys, and/or crafted attempts to sign transactions.”

The Ethereum Foundation called the upcoming merger “the most significant upgrade in Ethereum’s history” and urged users to be on “high alert” against scams trying to take advantage of users during the transition. He repeatedly warned that there is no such thing as an ETH2 or ETH 2.0 coin.

Related: Vitalik Buterin Impersonators Spread ETH Phishing Ahead of The Merge

Most onlookers expect the update to be successful, given the experience of previous test networks, however Bassi said there could still be a chance that fraudsters or hackers found a way to game the system.

“We actually don’t know if a group of fraudsters/hackers have already developed an attack or DDoS technique against the chain that can be used after the merge when ETH 2.0 has the full economic value of ETH 1.0.”

“If such an attack were to occur, it would probably only temporarily affect the chain and possibly the market, as there are plenty of smart eyes watching post-merger behavior. However, an attacker will likely look for an opportunity to monetize any discoveries.”

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