Coinbase User Loses $11.5 Million in Latest Social Engineering Scam

In a shocking turn of events, a Coinbase user has reportedly fallen victim to a social engineering scam on Base, the Ethereum layer-2 network linked to the platform, resulting in the loss of 110 cbBTC valued at $11.5 million.

Blockchain investigator ZachXBT brought this exploit to light on January 31, uncovering a scheme that is part of a larger pattern of fraud impacting Coinbase users. This incident follows a concerning trend, with multiple individuals experiencing similar losses due to fraudulent activities.

According to ZachXBT, the stolen cbBTC was quickly shuffled through instant exchanges, making it challenging to trace and recover. The attacker efficiently transferred the funds across various platforms before consolidating them with other assets on Ethereum, rendering the recovery process nearly impossible.

The investigator revealed that this latest breach is just one in a series of thefts targeting Coinbase users, totaling an estimated $150 million in losses. Expressing his concern, ZachXBT emphasized the severity of the situation and highlighted the inadequacies in Coinbase's response to such incidents.

While Coinbase is yet to address this specific exploit, reports indicate a rise in scams where fraudsters impersonate Coinbase support to deceive users into divulging sensitive information. Phishing emails, spoofed calls, and other deceptive tactics are commonly employed by these criminals to gain unauthorized access to accounts and siphon funds undetected.

This troubling scenario echoes a previous case where a Coinbase Commerce vendor suffered a significant loss of $15.9 million without any intervention from the exchange's anti-money laundering system. Another elaborate phishing scheme saw an imposter make off with $6.5 million under the guise of a Coinbase support team member in October 2024.

As the incidents of fraud continue to escalate, there is a growing sense of urgency for Coinbase to bolster its security measures and protect its user base from sophisticated cyber threats. Failure to address these vulnerabilities could not only undermine trust in centralized exchanges but also underscore the critical need for enhanced security protocols industry-wide.