$1.7 Million Lost to Scammers Masquerading as Coinbase Reps

A new cryptocurrency scam has emerged, with fraudsters posing as Coinbase employees to swindle users out of millions. Tegan Kline, co-founder of Edge & Node, revealed that his friend lost $1.7 million from their self-custody wallet after falling victim to this scheme.

The scammers initially contact the victim through a phone call, pretending to be from Coinbase. They follow up with an email that appears to be from Coinbase’s security team, using the name “David Brown” and claiming the recipient is “speaking to an official” Coinbase representative. To seem credible, they mention the victim’s past transactions on Coinbase.

The scammers then claim that the victim’s wallet is “connecting directly with the blockchain,” causing unauthorized transactions. An email with details of an outgoing transaction follows, intensifying the urgency. The victim is directed to a fake website controlled by the scammers.

Despite suspecting the site’s safety, the victim entered part of their key phrase, which was enough for the scammers to steal $1.7 million. Hiro Systems CEO Alex Miller explained that these malicious websites capture data as it is entered, allowing scammers to brute force the rest of the key phrase. Miller also faced a similar scam, where fraudsters claimed someone was trying to access his account. He suspected his email leaked during a 2022 CoinTracker data breach.

Miller advises CoinTracker users to cycle their API keys, which scammers use to verify their victims. He described the scam as moderately targeted, noting that the fraudsters created a look-alike email address and spoofed a similar phone number. However, they hadn’t attempted to phish him further.

Another X user, “TraderPaul04,” shared a similar experience. He received an automated call claiming his Coinbase account was being accessed from a different location, followed by a call from a fake Coinbase employee. He then received a phishing link disguised as a password reset request, which he identified and avoided.