A user loses $1.7 million to scammers posing as Coinbase in a series of attacks

  • A victim claiming to have lost $1.7 million reported that they received phone calls from a scammer posing as Coinbase and emails that appeared to be from the cryptocurrency exchange.

In the last week, at least three Coinbase users and one cryptocurrency user have reported being targeted by scammers posing as Coinbase employees. One victim has claimed to have been defrauded of $1.7 million.

Tegan Kline, co-founder of Edge & Node, provided an explanation to X on July 7 from a “good friend” whose self-custody wallet had been depleted of $1.7 million the day before after they were duped into disclosing a portion of their seed phrase by an online scammer.

The fraudster allegedly pretended to be from Coinbase’s security team when they contacted, and they then sent the victim an email purporting to be from Coinbase, which confirmed the victim was speaking with a Coinbase official.

The con artist stated that transactions were coming out of the victim’s wallet because it was making a direct connection with the blockchain. A second email, purporting to be from Coinbase and displaying an outgoing transaction, was subsequently sent by the con artist.

The victim realized the webpage asking for their seed phrase to stop the transactions was a fraud, but she nevertheless input part of it without submitting it. The scammer then took advantage of her.

They said that after several hours, $1.7 million had been taken out of their wallet.

According to Hiro Systems CEO Alex Miller, these websites collect data even when you don’t submit it, and since the victim only partially disclosed their seed phrase, “the bad guys [had] to brute force the rest.”

Miller revealed that he had recently received a similar scam from a con artist posing as Coinbase. He thinks the email service provider database of CoinTracker may have disclosed his information in 2022.

He added that specifically, they were connecting to CoinTracker using my Coinbase API key in order to confirm that they were me (along with other information). Miller suggested that if you have been using CoinTracker, you should at the very least cycle your API keys.

When a fictitious Coinbase representative called them on July 3 and said there had been an attempt to enter into their account from a different city, X user TraderPaul04 reported what they described as a rather advanced similar social engineering attempt.

According to TraderPaul, a man American purporting to work at Coinbase gave their full identity and verified their email address before stating that their Coinbase account had been temporarily locked. He then sent a fictitious password reset link in an attempt to obtain their account password.

TraderPaul said the con artist hung up after failing to persuade him not to, but he wasn’t persuaded and insisted on contacting Coinbase customer support directly.

A phony Coinbase representative called and claimed someone had tried to enter into their Coinbase account, according to a post made by X user beanx on July 7.

When Cointelegraph reached out to Coinbase for a comment, no one responded right away.

In the first half of 2024, there were around $1.19 billion in losses due to crypto security incidents, with over $900 million being taken through phishing and seed phrase compromise attempts.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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