Coinbase Faces Backlash as Users Lose $150 Million to Sophisticated Scams

Fraud Escalates With Coinbase Users Losing $150 Million in Scams

Coinbase, one of the world’s largest cryptocurrency exchanges, has been at the centre of a worrying surge in social engineering scams.

Over the past year, users have lost an estimated $150 million, with one victim alone losing $11.5 million in Bitcoin on Coinbase’s Base network.

These incidents have sparked intense concerns regarding the exchange's ability to safeguard user assets from sophisticated fraud tactics.

The Growing Threat of Social Engineering Scams

Blockchain analyst ZachXBT recently uncovered yet another alarming scam targeting Coinbase users.

The latest victim, who fell prey to a phishing attack, lost 110 cbBTC, a wrapped Bitcoin token unique to Coinbase.

The stolen funds were quickly laundered, passing through various exchanges and platforms, making any potential recovery nearly impossible.

Source: Investigations by ZachXBT Telegram

ZachXBT’s findings indicate that the stolen funds were eventually mixed and bridged to Ethereum, compounding the complexity of tracing the assets.

$150 Million Lost – The Scale of the Problem

ZachXBT, who has been independently tracking these scams, revealed that the total losses tied to such frauds now surpass $150 million, based on verified incidents.

However, he acknowledged that the real number could be higher, as many thefts go unreported or are not yet confirmed.

ZachXBT highlighted the rising frequency of these thefts, stating,

“Coinbase has a serious fraud problem.”

Source: Investigations by ZachXBT Telegram

This is not the first time ZachXBT has made such a claim.

Scammers Exploit Trust Through Deceptive Tactics

The methods employed by fraudsters are becoming increasingly sophisticated.

Victims are often tricked into revealing sensitive information such as login credentials or private keys through phishing emails or spoofed customer service calls.

Once attackers gain access to a Coinbase account, they swiftly move the stolen assets across multiple platforms to conceal their trail.

This makes it increasingly difficult for law enforcement or the exchange itself to recover the funds.

Coinbase's Security Measures Under Scrutiny

Coinbase’s response to these incidents has drawn significant criticism.

Despite multiple high-profile thefts, including a $15.9 million loss from a Coinbase Commerce vendor and another $6.5 million taken in October, the exchange has been accused of lacking an effective fraud prevention and customer support system.

ZachXBT expressed frustration with Coinbase’s inability to assist victims, stating,

"Coinbase does not help the victims, and no other major exchange has this same issue."

Growing Pressure on Coinbase to Strengthen Security

As more cases come to light, it is clear that Coinbase is facing mounting pressure to improve its security measures.

The rise in social engineering scams presents a severe challenge to both the platform’s reputation and its users' trust.

Without stronger protections in place, Coinbase risks further damaging its credibility and could ultimately see a decline in user confidence in centralised exchanges.