Alejandro Arrieche
The Ethereum Merge has seen an increased number of scammers attempting to take advantage and steal money from unwary bystanders and crypto enthusiasts.
Multiple users on social media have been warning that scammers are using fake accounts that impersonate the founder of Ethereum, Vitalik Buterin, and other well-known characters in the space to obtain the private keys of wallet addresses through fake giveaways.
In addition, reports indicate that various verified accounts on Twitter such as @cityarabia, @gofirstairways, and @imagekhabar have been reportedly hacked. The profile pictures of these accounts have been changed to that of Buterin and the name has also been modified to mislead users.
seems like everybody impersonates @VitalikButerin, but you gotta love the blue check and prominent amplification.
(p.s. THIS IS A SCAM) pic.twitter.com/xw3IHI7muv
— Steve Randy Waldman (@interfluidity) September 14, 2022
Dozens of verified accounts appear to have been victims of this massive hack, although Twitter is yet to comment on the incident.
The Merge has been a widely awaited event that has put the Ethereum network in the spotlight and has attracted the attention of numerous mainstream media outlets.
As a result, thousands of people have been drawn to the crypto market and may not be fully aware of how scammers typically operate to steal money from investors.
On Thursday, the transition was completed as the Beacon Chain was merged with the project’s mainnet. This technical upgrade instantly reduced the network’s energy consumption by more than 99% and is the first step to improve its scalability and transaction speed.
FTC Report Points to $1 Billion in Crypto Stolen Since 2021
A report from the US Federal Trade Commission (FTC) published in June estimated that approximately $1 billion worth of crypto have been stolen since the start of 2021 resulting in over 46,000 people being by the activities of scammers and fraudsters in the space.
The majority of the incidents involved the theft of Bitcoin (BTC), with the popular crypto token accounting for 70% of the total funds that were stolen, while roughly 40% of the crimes took place within the confines of social media platforms.
Instagram and Facebook were named in the report as they were reportedly used to perpetrate more than half of these crimes, while Twitter was not named in the report.
Investment-related scams were the most popular as nearly $600 million were taken from the victims through devious offerings and get-rich-quick frauds.
Senators in the US Ask for Information About Fraud Prevention Measures
In late August, members of the House Committee on Oversight and Reform of the United States Congress sent a letter to five crypto exchanges – Binance, Coinbase, FTX, Kraken and KuCoin – asking them what kind of measures they were taking to combat fraud on their respective platforms.
The Committee’s Chairman, Rep. Raja Krishnamoorthi, acknowledged that some of these brokers already have certain protocols in place to reduce the frequency of this kind of incident but still wanted more details about specific actions and policies.
“The lack of a central authority to flag suspicious transactions in many situations, the irreversibility of transactions, and the limited understanding many consumers and investors have of the underlying technology make cryptocurrency a preferred transaction method for scammers,” Krishnamoorthi argued.
The deadline for these exchanges to respond to the Committee’s questions expired on September 12 and it is highly likely that the legislative body will issue some sort of statement after they go through the responses sent by these firms.
Moreover, a group of Senators led by Bob Menendez (D) sent a similar inquiry to Meta Platforms (META), the parent company of Facebook, Instagram, and WhatsApp to get more information on what the firm is doing to combat crypto fraud.
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This article was written for Business 2 Community by Alejandro Arrieche.
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