Imagine the shock of waking up and realizing $1.7 million has vanished from your crypto account. Well, this is what happened to a Coinbase user this past week. According to reports, scammers posing as Coinbase staff accessed the user’s wallet and made away with the funds.
But how did this happen? This is a question that has bothered people worldwide. Edge & Node cofounder Tegan Kline, a friend of the user who was scammed, reported that a scammer claiming to be from Coinbase Global Inc. (NASDAQ: COIN) tricked the victim into revealing their seed phrase. Immediately after the call, they sent an employee verification email to the victim that looked legit – the branding was on point, the language was professional and the email even came from what seemed to be a genuine Coinbase domain. Because of this, the victim assumed that the scammers were part of the Coinbase security team, which convinced the user further.
In the email, the scammer identified themselves as David Brown and even revealed the recipient’s past Coinbase transactions. According to the email, there was a security threat, and the victim needed to secure their funds immediately. Without even a second thought, the victim followed the instructions to log into the account to secure their funds, but immediately after he clicked on the link, things took a turn for the worse.
The link took the user to a fake Coinbase login page, a website under the scammer’s control designed to steal their credentials. Unaware of this well-crafted deception, the victim entered the login details that the imposter had captured. But the story continues. To bypass the two-factor authentication (2FA), the scammer called the victim again, pretending to be a support agent, and asked for the 2FA code, claiming urgent security reasons.
Now armed with the user’s full credentials, the scammer made away with $1.7 million worth of cryptocurrency before the victim came to their senses. But this case is not unique. According to a report by Chainalysis Crypto Crime, $3.8 billion was stolen in 2022 as part of cryptocurrency-related crimes.
In the wake of this incident, cryptocurrency investors are advised to be vigilant and not fall for these deceptive scams. Coinbase has also launched an investigation into the matter and collaborated with authorities to track the scammers. Coinbase has also reiterated its commitment to user security. The company is taking measures to ensure all users know what to watch out for and what they can do to secure themselves and their funds against threats.
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