In the past two months, Coinbase users have collectively lost more than $65 million to social engineering scams, with annual losses estimated at $300 million, according to crypto analyst ZachXBT. He emphasized that the actual losses could be higher due to unreported cases. Coinbase has not issued a public comment nor responded to inquiries from CoinDesk at the time of publication.

Scammers leverage stolen personal data to trick users by sending fraudulent emails that mimic official Coinbase communications. These emails include fake case IDs and deceive users into transferring funds to wallets controlled by the scammers.

ZachXBT explained that scammers replicate the Coinbase interface almost identically, allowing them to send deceptive prompts via spoofed emails. The primary perpetrators of these scams are identified as skids from the Com and threat actors based in India, who predominantly target U.S. customers.

An alarming post by ZachXBT highlighted a Coinbase employee’s suggestion to avoid using VPNs to prevent being flagged as suspicious, while noting that scammers actively block VPNs on phishing sites.

This reflects Coinbase's need to address underlying security vulnerabilities. ZachXBT recommended several measures for Coinbase, including making phone number entries optional, introducing restricted account types for new users, and enhancing community education on preventing scams.

Coinbase is a leading U.S.-based cryptocurrency exchange and platform founded in 2012 that allows users to buy, sell, trade and store digital assets like Bitcoin and Ethereum. The publicly-traded company, which went live on the Nasdaq in 2021, serves as one of the largest regulated crypto platforms with over 100 million verified users globally. Coinbase provides services to both retail and institutional investors, offering features like staking, a digital wallet, and crypto-backed debit cards.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.