In the past week, at least three Coinbase users have fallen victim to scammers impersonating Coinbase representatives, with one person reportedly losing over $1 million.
On July 7, Tegan Kline, co-founder of Edge & Node, shared an incident involving a “good friend.” According to Kline, the scam began with a call from someone claiming to be from Coinbase security team member. The victim received a seemingly official email from Coinbase, confirming they were speaking to a legitimate representative. The scammer then falsely claimed the victim’s wallet was “connecting directly with the blockchain,” causing unauthorised transactions.
CT, a member of the community urgently needs your help.
$1.7 Million stolen – A good friend’s self custody wallet was drained by a scammer yesterday, July 6th.
TLDR of how it went down below (3 pages)⤵️
You can find the Ethereum transactions with links in the comment below.… pic.twitter.com/OTx3wslz6R
— Tegan.eth 🌅,🦩 (@theklineventure) July 7, 2024
The victim was directed to a website and asked to enter their seed phrase to stop the transactions. Despite knowing the risks, the victim entered a portion of the phrase without submitting it. Hours later, their self-custody wallet was drained of $1.7 million.
Hiro Systems CEO Alex Miller explained that websites like the one the victim was directed can capture data as it’s entered, making even partial reveals of seed phrases vulnerable to brute-force attacks.
Miller also shared that he was recently targeted by a similar scam. He suspects his information was leaked in 2022 from CoinTracker’s email service provider database.
“Specifically, they were using the Coinbase API key connecting to CoinTracker to verify that they were me (in addition to other info),”
he said.
He advised users to rotate their API keys if they’ve been using CoinTracker.
Two other X users, “TraderPaul04” and “beanx,” also reported similar encounters with scammers posing as Coinbase representatives last week. These attempts involved claims of suspicious login activities and fake password reset links.
As of press time, Coinbase had not yet released an official statement on these claims of representatives claiming false connections to it.
Meanwhile, these incidents come days after blockchain security firm Scam Sniffer published a report that cryptocurrency phishing scams saw a marked increase in profitability in the first half of 2024. According to the firm, malicious actors successfully stole over $314 million worth of cryptocurrency, a 6.44% increase compared to the previous year. Notably, $58 million of this total came from just 20 high-value targets, with one victim suffering an $11 million loss – the second-largest individual crypto theft.
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