Crypto Chat, News Coinbase Users Lose Millions to Scams Amid Allegations of Inaction

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Coinbase Users Lose Millions to Scams Amid Allegations of Inaction

Pseudonymous onchain analyst Zachxbt has claimed that Coinbase users, particularly the elderly, have lost over $300 million annually to social engineering schemes orchestrated by sophisticated Indian scam artists and a cybercriminal network known as "The Community". Social engineering involves manipulating individuals to gain access to private information, with one notable case involving hackers creating a clone of Coinbase's website to deceive victims.

In the past two months alone, users reportedly lost over $65 million to these scams. Zachxbt criticized Coinbase for failing to take adequate measures to address this issue, stating,
Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month.
He emphasized that most of the responsibility lies with the company's leadership.

When questioned about these allegations, Coinbase referred to a blog post published on the same day, which provided tips for mitigating social engineering risks. The post acknowledged that social engineering attacks are a significant cause of customer losses and noted a 10x increase in such attacks targeting financial institutions over the past year. However, it did not confirm or deny Zach's $300 million figure.

Zach pointed out that other exchanges like Kraken, OKX, and Binance do not face the same issues. He cited a report from Binance revealing that it had prevented scams that could have cost its customers $129 million. He criticized Coinbase for not reporting theft addresses used by hackers to launder stolen funds and for providing inadequate customer support to victims.

🛠 To combat the rise of scams, Zach suggested several measures Coinbase could implement, including making phone numbers optional for users with an authenticator app, allowing beginners and the elderly to disable withdrawals on their accounts, and ensuring 24/7 availability of support agents. He also urged Coinbase to establish better communication channels with its customer base.

Despite these challenges, Zach asserted that Coinbase has the resources to take legal action against members of The Com network and set a positive example in the industry. He stated,
Coinbase is in a position where they have the power to make these changes and set a good example, but they have chosen to do little to nothing.