Emily Walker
Recently, many users on social media platform X (formerly Twitter) have expressed their dissatisfaction with Coinbase, a cryptocurrency exchange based in the US, due to sudden account restrictions and blocks.
This surge in complaints has sparked serious worries about the effectiveness of Coinbase’s risk management strategies and its ability to protect users from social engineering scams, which reportedly cost customers more than $300 million each year.
$65 Million Lost During User Frustrations and Account Issues
Crypto investigator ZachXBT has linked these account problems to Coinbase’s “aggressive risk models,” suggesting that they prioritize security measures that negatively impact user access.
Through his analysis of Coinbase withdrawals, ZachXBT revealed that $65 million was taken from users from December 2024 to January 2025 alone. This amount may represent only a portion of the total losses.
One alarming incident involved a person losing around $850,000 to a well-planned scam. The scammer used a fake phone number and personal information from compromised databases to gain the victim’s trust.
Impersonating a Coinbase representative, the scammer claimed that there had been unauthorized attempts to access the victim’s account, despite Coinbase’s explicit warnings that they do not make such phone calls.
To reinforce their deception, the scammer sent a fake email seemingly from Coinbase with a fabricated Case ID to build credibility with the victim.
The scammer then instructed the victim to transfer funds to a Coinbase Wallet while they assured them that “support” was validating the account’s security.
Coinbase Under Fire for Insufficient Action
It has been reported that scammers have created nearly identical replicas of the Coinbase website, allowing them to send convincing phishing emails. Several Telegram channels have also surfaced where these scammers promote their malicious tactics.
The blame for these security lapses falls heavily on Coinbase’s leadership, which has faced criticism for not adequately tackling the root causes of these issues.
While it’s easy to blame the exchange entirely, ZachXBT points out that many victims report experiencing poor support from Coinbase. They often find themselves dealing with customer service representatives who can’t provide effective help.
Additionally, the exchange’s team is said to be “often hard to reach” outside of US business hours, which is a significant drawback in a 24/7 marketplace, making things even more challenging for its users.
To address these challenges, suggestions include offering account options that provide enhanced security for more experienced users and improving resources to educate those less knowledgeable about online safety.
Additionally, taking legal action against both the scammers and the tools that facilitate these crimes might deter further incidents and indicate a commitment to protecting users.
Featured image from DALL-E, chart from TradingView.com