- Crypto scammers stole a Coinbase user’s $1.7 million via seed phrase compromise
- Other Coinbase users have complained of attempt to defraud them too
- $900 million was stolen via seed phrase compromise attacks and phishing in the first half of 2024
Scammers who impersonated the popular United States-based cryptocurrency exchange, Coinbase, have swindled a user of the exchange out of $1.7 million.
In the past week, at least three users of the platform have said the scammers have targeted them.
In an X post, Tegan Kline, co-founder of Edge & Node, said the swindled person is her “good friend”, whose self-custody wallet had been depleted of $1.7 million the after they were duped into disclosing a portion of their seed phrase.
Source: X/Tegan Kline
Kline explained that the victim reported that the scammer had called, posing as a member of Coinbase's security team, and had even sent an email purporting to be from the company, confirming that the victim was in fact "speaking to an official representative at Coinbase."
The scammer stated that transactions were emanating from the victim's wallet because it was "connecting directly with the blockchain." Another email purporting to be from Coinbase and displaying an outgoing transaction was then sent by the scammer.
Source: X/Tegan Kline
The scammer asked the victim to enter their seed phrase on the website to stop the transactions. The victim said they knew it was “not safe” but entered “a portion” of their phrase anyway, without submitting it.
They said that after several hours, they noticed that $1.7 million had been taken out of their wallet.
Source: X/Tegan Kline
Advanced scammers in the crypto space
Alex Miller is the CEO of Hiro Systems. According to him, as quoted by CoinTelegraph, even without submitting, the website used by scammers can capture users' data. He said they can get the data because they “are capturing data as you enter it.” He explained further that partial disclosure of a victim’s seed phrase is enough for some scammers to gain access.
Miller revealed that he had received a similar scam from a scammer posing as Coinbase. He believes his information may have been leaked in 2022 from CoinTracker’s email service provider database.
“Specifically, they were using the Coinbase API key connecting to CoinTracker to verify that they were me (in addition to other information). At the very least, cycle your API keys if you have been using CoinTracker,” Miller said.
Source: Certik
The crypto space is a high-risk space. In the first half of 2024 alone, security incidents cost the sector about $1.19 billion, while more than $900 million was stolen via seed phrase compromise attacks and phishing, according to a recent CertiK Web3 Security Report.
KuCoin to charge 7.5% VAT on trading fees for Nigerian users
Meanwhile, TheRadar earlier reported that KuCoin, one of the leading crypto exchanges used by Nigerians, has said it would begin to charge a 7.5% Value Added Tax (VAT) fee on trades executed by its users whose Know Your Customer (KYC) is registered in Nigeria.
In a post on X, the exchange described it as a “regulatory update that impacts our users from Nigeria” and stated that the new measure will take effect from July 8th, 2024.
