Home Coinbase users reportedly lost $65M in two months to crypto scams

Coinbase users reportedly lost $65M in two months to crypto scams

A crypto sleuth has claimed that Coinbase users had more than $65 million stolen from them in the past two months. The user, who goes by the handle ZachXBT, suggested that the cryptocurrency exchange platform had failed to stop its users from losing over $300 million per year to social engineering scams.

He mentioned that the estimated $65 million is probably way lower than the real number since it doesn’t include cases reported to Coinbase support or the police.

Working with another user named tanuki42_, ZachXBT reported on X that alleged victims had reached out to them in January after losing more than $850,000. The scammer had reportedly called the user from a spoofed phone number and used personal information obtained from a private database to gain their trust. They then told the victim that their account had multiple unauthorized login attempts, despite the fact that Coinbase does not call its users.

They then reportedly sent a message from a spoofed email that looked like it was from Coinbase, complete with a fake Case ID to make it seem legitimate. They told the victim to transfer their funds to a Coinbase Wallet and whitelist an address while “support” supposedly verified their account’s security. He identified that the two main groups conducting these scams were located in India, and were both primarily targeting US customers.

ZachXBT added: “Scammers clone the Coinbase site nearly 1:1 and allow the scammers to send different prompts to the target via spoofed emails using panels.

“There are many Telegram channels where scammers advertise them.”

Coinbase criticized over social engineering scams

He then went onto criticize the platform, stating: “Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month.

“Other major exchanges do not have similar panels created by scammers for fraud.”

He claimed that most of the time, Coinbase doesn’t even report the scammers’ addresses, even when the thefts have been happening for weeks.

“A Coinbase employee told people on X to stop using VPNs to avoid being flagged as suspicious, meanwhile threat actors will explicitly block VPNs from phishing sites,” ZachXBT pointed out. “This shows Coinbase’s failure to diagnose the actual problem.”

The onchain expert urged Coinbase leadership to step up their game against social engineering attacks. They’re suggesting changes like making phone number entry optional for KYC-verified users, introducing a beginner account type that limits withdrawals, and stepping up community outreach to better protect users.

ReadWrite has reached out to Coinbase for comment.

Featured image: Canva

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Suswati Basu
Tech journalist

Suswati Basu is a multilingual, award-winning editor and the founder of the intersectional literature channel, How To Be Books. She was shortlisted for the Guardian Mary Stott Prize and longlisted for the Guardian International Development Journalism Award. With 18 years of experience in the media industry, Suswati has held significant roles such as head of audience and deputy editor for NationalWorld news, digital editor for Channel 4 News and ITV News. She has also contributed to the Guardian and received training at the BBC As an audience, trends, and SEO specialist, she has participated in panel events alongside Google. Her…

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