Ethereum (ETH) 2.0 Scammers Launch Fake 'PoS Mining'

News
Sun, 04/05/2020 - 15:43
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Vladislav Sopov
Even though Ethereum (ETH) 2.0 staking is actually nowhere near its launch, scammers have already started to impersonate Ethereum (ETH) Proof-of-Stake validators.
Ethereum (ETH) 2.0 Scammers Launch Fake 'PoS Mining'
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A well-designed fraudulent website that offers an 'Ethereum 2.0 PoS Mining' service started to accept deposits from gullible investors. The scammers have guaranteed an annual minimum reward of 100% for staking 0.2 ETH. Investors can also become a 'Node Operator' with the new Ethereum (ETH) for $150,000 only!

Ponzi Proof-of-Stake (PoS) Consensus

Apart from its technological entourage, this scam represents nothing more than a primitive Ponzi scheme. Ethereum (ETH) holders are asked to send the scammers their funds (ranging from 0.2 ETH to 1024+ ETH) in order to obtain unbelievably high periodical rewards.

Ethereum (ETH) 2.0 Scammers Target Ether Owners

It should be added that the fraudsters pretend to use all of the Proof-of-Stake terminology. According to their statements, mysterious 'PoS Mining' is a lifetime investment opportunity. This includes the following:

Most blockchains that work with the PoS algorithm allow you to set coins yourself. But usually this will not allow you to make the most of your bet. Your bid must remain connected to the network around the clock. Even a short-term incorrect connection can interfere with the possibility of making money, since the wallet will end up in the queue. 

With their services, you need just to stake your coins (by sending it to an 'Ethereum PoS' account) and wait for periodical rewards. If this scheme was real, it may look more like a Delegated Proof-of-Stake consensuses because the scammers say nothing about sharding, slots, epoch, and the initial stakes of 32 ETH, i.e. about all firmware attributes of true Ethereum 2.0.

Why is This a Project Scam?

Apart from the true economical futility of such schemes, there are too many 'red flags' over this particular project.  Let's only name the Top 5:

  1. Ethereum (ETH) 2.0 has not launched yet. All detailed predictions for its 'hello world' date were made before the COVID19 outbreak, so, it may take longer than a year.
  2. No staking in Ethereum (ETH) 2.0 is available yet. The actual Ethereum (ETH) network utilizes a Proof-of-Work (PoW) consensus and its transactions are processed by miners, not stakers. 
  3. No credible asset in crypto can guarantee an investor an annual return of 100% as a staking reward. According to Staking Rewards analytical tool, the average yearly payout in this room is 14.5%.
  4. The project misleads users by publishing real Ethereum Foundation developer links. For example, the scam project's 'GitHub' source code is actually that of Ethereum.org
  5. The scammers use the 'Donations' address of MyEtherWallet ,claiming that this is their own address with a balance 400 ETH.

Unfortunately, these fraudsters ask users to 'confirm' their URLs by e-mail and to enable 2FA so they may also steal a sensitive amount of private data. 

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About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)