How Coinbase Users Lost $65M to Scammers (And Why They’re Still Smiling)

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ZachXBT, the crypto world’s answer to Sherlock Holmes (if Sherlock wore a hoodie and spent his days scrolling through X), is calling out Coinbase for letting its users lose a cool $65 million to scammers in just two months. That’s right, folks—December 2024 to January 2025 was apparently the season of giving… to criminals. 🎁💸

In a viral thread that’s been viewed more times than my last attempt at baking sourdough, ZachXBT teamed up with tanuki42, a web3 security investigator who sounds like a character from a Japanese anime. Together, they compiled horror stories from Coinbase users who fell victim to social engineering scams. Spoiler alert: it’s not pretty.

After sifting through direct messages from X users (because apparently, that’s how investigations work now), the duo concluded that at least $65 million was stolen. But Zach, ever the optimist, thinks the real number is probably much higher. After all, who has time to file a police report when you’re busy crying over your empty crypto wallet? 😭

Zach predicts that if Coinbase doesn’t get its act together, users could lose over $300 million a year to these scams. That’s enough to buy a small island or, you know, fund a decent indie film about crypto scams. 🎥

Crypto.news reached out to Coinbase for comment, but so far, crickets. Maybe they’re too busy counting their fees to notice the chaos. 🤷‍♂️

1/ Over the past few months I imagine you have seen many Coinbase users complain on X about their accounts suddenly being restricted.

This is the result of aggressive risk models and Coinbase’s failure to stop its users losing $300M+ per year to social engineering scams.

— ZachXBT (@zachxbt) February 3, 2025

In the past few months, dozens of Coinbase users have taken to the internet to complain about their accounts being restricted. Coinbase, in a move that screams “nothing to see here,” blamed it on “FUD/misinformation.” They also claimed that the surge of new users and old users reactivating their accounts after the U.S. election led to a threefold increase in fraudulent attempts. Because, of course, elections and crypto scams go hand in hand. 🇺🇸

“Our fraud-prevention systems are acting as expected and have saved customers tens of millions in losses in November alone,” wrote Coinbase Support. Translation: “We’re doing our best, but also, good luck out there.”

Zach, however, wasn’t buying it. He called out Coinbase’s “aggressive risk models” and their failure to stop users from losing $300 million a year to scams. But hey, at least they’re consistent. 🎯

Scammers Posing as Coinbase Support

Here’s how it works: scammers call you from a spoofed number, tell you your account has been compromised, and send a fake email with a fake case ID. They then instruct you to transfer funds into a Coinbase wallet while “support” verifies your account security. The link in the email takes you to a cloned Coinbase site, where scammers can send you spoofed prompts. It’s like a phishing expedition, but with more emotional trauma. 🎣

ZachXBT pointed out that Coinbase has failed to properly “diagnose the actual problem,” though he did give them credit for a few things, like providing recovery tools for users who deposit unsupported assets. Because nothing says “we care” like helping you recover from your own mistakes. 🙌

He urged Coinbase to make phone numbers optional for advanced users, create a beginner-friendly app that doesn’t allow withdrawals (because apparently, we can’t be trusted), improve community outreach, and take legal action against U.S.-based scammers and TransUnion for negligence. Because when in doubt, sue someone. ⚖️

“Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month,” said ZachXBT. In other news, water is wet, and I’m still waiting for my crypto to moon. 🌕

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2025-02-04 11:12