Social Engineering Scams Are on the Rise, and These Exploits Have Particularly Targeted Coinbase Users

Throughout the first quarter of 2025, several Coinbase users fell victim to social engineering scams.

Social engineering scams have been affecting Coinbase users throughout the first quarter of 2025. So far, Web3 researcher ZachXBT has reported that these scams have resulted in over $100 million in funds lost by December 2024, while annual losses are said to have reached $300 million.

After sorting through the complaints made by different users, BeInCrypto spoke with Coinbase Chief Information Security Officer (CISO) Jeff Lunglhofer to understand what makes users vulnerable to these kinds of attacks, how they happen, and what’s being done to stop them.

Gauging the Seriousness of Scams Affecting Coinbase Users

Throughout the first quarter of 2025, several Coinbase users fell victim to social engineering scams. Considering that the leading centralized exchange in a sector where hacks are becoming more sophisticated with time, this reality is no surprise.

In a recent investigation, Web3 researcher ZachXBT reported on several messages he received from different X users who had suffered major withdrawals from their Coinbase accounts.

On March 28, ZachXBT uncovered a significant social engineering exploit that cost one individual nearly $35 million. The crypto sleuth’s further investigations during that period revealed additional victims of the same exploit, pushing the total stolen in March alone to more than $46 million.

In another investigation concluded a month earlier, ZachXBT revealed that $65 million was stolen from Coinbase users between December 2024 and January 2025. He also reported that Coinbase has been quietly dealing with a social engineering scam issue costing its users $300 million a year.

While Coinbase users have been particularly vulnerable to social engineering scams, centralized exchanges, in general, have also been significantly impacted by these increasingly sophisticated attacks.

How Does The Broader Context Reflect This Situation?

Public data regarding the evolution of social engineering scams in recent years is limited and somewhat outdated. Still, the numbers in the available reports are staggering.

In 2023, the Internet Crime Complaint Center (IC3) undertook by the US Federal Bureau of Investigation (FBI) released its first-ever cryptocurrency report. Investment fraud constituted the largest category of cryptocurrency-related complaints, covering 46% of the nearly 69,500 complaints received, or about 33,000 cases.

Investment fraud, or pig butchering, involves false promises of high returns with low risk to lure investors, especially crypto newcomers driven by a fear of missing out on significant gains.

According to the IC3 report, these schemes rely on social engineering and building trust. Criminals use platforms like social media, dating apps, professional networks, or encrypted messaging to connect with their targets.

In 2023, these investment scams resulted in losses of $3.96 billion for users, representing a 53% increase from the previous year. Other social engineering scams, like phishing and spoofing, further constituted $9.6 million in losses.

These scams have affected Coinbase users extensively over the past few years.

New Scam Tactics Targeting Crypto Users

Coinbase scammers tend to create fake emails that appear legitimate using cloned website images and false Case IDs. They then contact users through spoofed calls, leveraging private information to build trust before sending them these deceptive emails.

Once scammers have convinced users of the interaction’s legitimacy, they exploit the situation to persuade them to transfer funds.

The increasing sophistication of these scams showcases both the emotional manipulation involved and the victims’ particular vulnerability. They highlight that centralized exchanges are often the primary platforms for these exploitations.

While discussing the scams on X, victims and users whose funds were frozen are urging Coinbase to take stronger action against this growing and costly issue. To understand how these scams take place is essential to effectively address them.

How Are Coinbase Users Made Victims?

In January, a victim contacted the investigator after losing $850,000. In that instance, the scammer contacted the victim from a spoofed phone number, using personal information likely obtained from private databases to gain their trust.

The scammer convinced the victim that their account had suffered multiple unauthorized login attempts by sending them a spoofed email with a fake Case ID. The scammer then instructed the victim to safelist an address and transfer funds to another Coinbase wallet as part of a routine security procedure.

Last October, another Coinbase user lost $6.5 million after receiving a call from a spoofed number impersonating Coinbase support.

The victim was coerced into using a phishing site. Eight months earlier, another victim lost $4 million after a scammer convinced them to reset their Coinbase login.

While discussing this issue on X, ZachXBT raised concerns about Coinbase’s lack of reporting the theft addresses in common compliance resources and their perceived inadequate handling of the escalating social engineering issue.

In a conversation with BeInCrypto, Jeff Lunglhofer, Coinbase’s Chief Information Security Officer,