In recent months, a noticeable uptick in complaints has emerged from users on X (formerly known as Twitter), all centered around unexpected account restrictions and blocks on Coinbase, the well-known cryptocurrency exchange based in the U.S. These grievances are adding to concerns about how effectively Coinbase manages risks, particularly in stopping users from falling prey to social engineering scams, which are currently costing customers more than $300 million each year.
$65 Million Lost Amid Growing Concerns
Prominent crypto investigator ZachXBT has pointed a finger at Coinbase’s "aggressive risk models" as a contributing factor to these account issues, arguing that these models tend to focus heavily on security, sometimes at the expense of user accessibility. ZachXBT’s investigation into Coinbase withdrawals revealed a staggering $65 million stolen from users between December 2024 and January 2025—a number that may only represent a portion of the true losses.
One of the more alarming cases involved a victim who was swindled out of nearly $850,000 through a highly sophisticated scam. The scammer, armed with a spoofed phone number and personal details from compromised databases, posed as a trustworthy entity. Masquerading as a Coinbase representative, the scammer misled the victim by claiming there were unauthorized attempts to access their account. It’s worth noting that Coinbase has explicitly advised users to be cautious of such tactics, as they would never initiate phone calls.
To further deceive the victim, the scammer sent a fake email purportedly from Coinbase, complete with a phony Case ID, thus further building the illusion of legitimacy. The victim was then convinced to transfer money to a Coinbase Wallet and to whitelist a specific address, all under the guise of a "support" team assessing their account’s security.
Criticism of Coinbase’s Response
It seems scammers have managed to create almost perfect replicas of the Coinbase website, allowing them to send convincing phishing emails. These scammers are also known to be marketing their malicious tools openly in numerous Telegram channels.
The leadership at Coinbase has faced harsh criticism for not adequately tackling these security concerns. Although it might be easy to only blame the exchange for these issues, ZachXBT points out that the situation is slightly more complex. Many victims have reported that the support they received from Coinbase was subpar, as they often found themselves stuck with customer service representatives who provided little help.
Moreover, it’s been noted that reaching the Coinbase team outside standard U.S. business hours can be "frequently difficult," which is a significant problem for users, especially in a market that operates around the clock.
To address these challenges, there have been calls for enhancements like setting up more advanced security options for experienced users and offering better outreach and educational resources for those less familiar with online security intricacies. Additionally, pursuing legal measures against the scammers and those who create these criminal tools might deter future crime and show a strong dedication to protecting users.
The 1D chart shows COIN’s stock price. Source: COIN on TradingView.com
Featured image from DALL-E, chart from TradingView.com
