- Scammers impersonating Coinbase trick users into revealing seed phrases, leading to significant financial losses.
- Victims report receiving calls and emails appearing to be from Coinbase security.
- Over $900 million stolen through phishing and seed phrase attacks in the first half of 2024.
At least three Coinbase users and one cryptocurrency user reported falling victim to scammers impersonating Coinbase representatives in the past week. One victim lost $1.7 million after being tricked into sharing part of their seed phrase.
Tegan Kline, co-founder of Edge & Node, shared on X that a close friend lost $1.7 million from their self-custody wallet on July 6. The scam began when the victim received a call from someone claiming to be from Coinbase’s security team. The scammer followed up with an email that appeared to be from Coinbase, convincing the victim they were speaking with an official representative.
Deceptive Tactics Used by Scammers
The scammer told the victim their wallet was “connecting directly with the blockchain,” causing unauthorized transactions. The victim was directed to a website to enter their seed phrase to stop the transactions. Despite knowing it was unsafe, the victim entered a portion of their seed phrase. Hours later, $1.7 million was drained from their wallet.
Alex Miller, CEO of Hiro Systems, explained that such websites capture data as it is entered, even without submitting it. The partial seed phrase reveal was likely enough for the scammers to brute-force the rest. Miller himself was recently targeted by a similar scam and believes his information may have been leaked in 2022 from CoinTracker’s email service provider database.
Increasing Reports of Sophisticated Scams
On July 3, a user named “TraderPaul04” shared their experience with a similar social engineering attempt by a fake Coinbase representative. The scammer claimed there was a login attempt on their account from another city. TraderPaul insisted on calling Coinbase customer service directly, causing the scammer to hang up.
Another user, “beanx,” reported a similar scam call on July 7. The fake Coinbase representative claimed someone attempted to login to their account.
Coinbase did not immediately respond to requests for comment. The first half of 2024 saw around $1.19 billion lost to crypto security incidents, with over $900 million stolen through phishing and seed phrase compromise attacks.
