Over $5 million in crypto stolen from Coinbase users in alleged recent social engineering scheme: ZachXBT

Blockchain sleuth ZachXBT said Monday that he has helped recover about $275,000 worth of cryptocurrencies for a Coinbase customer who was a victim of a social engineering scheme. While investigating this fraud, the pseudonymous crypto-security expert said he found evidence of $5 million in additional stolen bitcoin and ether tokens related to the same alleged scam. 

“In April 2024 an elderly victim from the US was targeted by Indian call scammers posing as Coinbase support resulting in a large portion of their life savings stolen,” ZachXBT wrote on X. 

It is not yet clear how the stolen funds were frozen. Reportedly, the elderly victim held funds on a Ledger hardware device and was convinced to move them after scammers said their exchange account was compromised. 

At least two reporters for The Block also said they received similar calls from scammers attempting to convince them their Coinbase accounts were hacked, representing the scam profile described by ZachXBT. However, in one instance, due diligence revealed that Coinbase had not sent an actual security alert. 

“Ya it’s hard to blame elderly victims who fall for these scams,” ZachXBT said. 

According to ZachXBT’s investigation, approximately 15 BTC +1.56% were sent to an unlabelled centralized exchange on Aug. 10, a day after the scheme was perpetrated, and then moved onto the Tron TRX +1.13% blockchain. Nearly $200,000 worth of USDT -0.05% was sent to a separate OTC desk. 

Analytics firm Chainalysis found that illicit onchain activity had dropped in the first two quarters of 2024 compared to the previous year. However, stolen funds and ransomware “are on the rise.”

“Specifically, stolen funds inflows nearly doubled from $857 million to $1.58 billion, while ransomware inflows rose by approximately 2%, from $449.1 million to $459.8 million,” the firm wrote in a mid-year report. 

Both the Securities and Exchange Commission and Commodity Futures Trading Commission have issued warnings about rising crypto fraud, in particular “pig butchering” confidence schemes. 

Last month, ZachXBT disclosed he participated in an investigation with law enforcement that found a hacking group  stole $243 million from a single unnamed individual.