A report by ZachXBT reveals Coinbase users lost $45 million to social engineering scams within a week. This is part of an ongoing trend costing users an estimated $330 million annually. The analysis suggests only Coinbase users are affected, with potential causes including slow customer response and existing vulnerabilities. ZachXBT also offered recommendations to improve user security.
In a concerning revelation, on-chain security analyst ZachXBT highlighted that Coinbase users fell victim to a staggering $45 million in social engineering scams within just one week. The report outlines a troubling trend where users of the largest cryptocurrency exchange in the U.S. face ongoing financial losses due to manipulative schemes, which have existed for several months.
Social engineering scams are quite notorious for tricking users into disclosing sensitive data. This often occurs through various deceptive methods, like impersonations, phishing links, or even cleverly baiting targets. Such methods sometimes catch even the savviest crypto enthusiasts off guard.
In a broader perspective, ZachXBT estimates that these ongoing attacks are costing Coinbase users approximately $330 million annually. The analyst pointed out that just a week prior, another $46 million was reported lost to similar scams, showing a persistent pattern of fraudulent activity. The overall losses within recent months are reaching nine figures, a worrying situation prompting calls for urgent attention.
ZachXBT’s analysis revealed that these scams predominantly prey on Coinbase users, while other platforms seem to be less impacted. His findings were supported by collaborative insights from fellow investigator “Tanuki42,” who contributed to identifying the root causes behind these persisting scams. The focused nature of these attacks seems exclusive to Coinbase, which raises eyebrows.
Adding to the complexity, Ripple’s Chief Technology Officer David Schwartz previously warned of a similar threat during January. Schwartz recounted how he received a phishing email allegedly from a Coinbase representative instructing him to update his account in the name of improving user experience. This reinforces the ongoing necessity for vigilance among crypto users.
ZachXBT has not sat idly by; he has voiced his frustration regarding Coinbase’s inadequate action towards these growing threats. Yet, he acknowledged their notable achievements, including legal battles to navigate clearer regulatory frameworks and advancements like the layer 2 network called Base.
As for the reasons why scammers find easy targets in Coinbase, ZachXBT didn’t hold back. He indicated a slow response to customer complaints, particularly during off-hours, adds to the risk. He also pointed to unreported security vulnerabilities, such as a bug allowing verification codes to be sent to non-registered emails, which could be exploited.
To counteract the alarming trend, ZachXBT proposed several potential solutions. These include making phone numbers optional for advanced users who are verified through KYC and introducing a beginner or elderly user account type with restricted withdrawals. This could potentially protect less experienced users.
A significant trend emerging in the world of cryptocurrencies is the rise of social engineering scams. The FBI recently reported that U.S. crypto users lost around $9 billion to scams in 2024, with a major portion attributed to social engineering tactics. Thus, it becomes critical for users to stay alert and well-informed about potential risks.
Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. The views presented are solely those of the author and don’t necessarily represent The Crypto Basic’s opinions. It’s important for readers to conduct thorough research prior to any investment choices. The Crypto Basic is not liable for any financial losses.
