Coinbase Scam – How Fraudsters Use Coinbase for Schemes

Coinbase – ranked among the biggest and most popular cryptocurrency platforms in the world – is the choice of many investors. According to its website, the Coinbase liquidity is deep, one of the most liquid regulated crypto spot exchanges in the world. 

Directly competing with the likes of Binance and Bybit, the company is constantly seeking to gain an edge and attract as many users as possible. However, it has also drawn the eyes of duplicitous cyber fraudsters. A classic Coinbase scam revolves around duping individuals into investing in worthless products or paying for fake services.

Keep reading to find out how Coinbase works, what users have to say about it, potential fund withdrawal issues, Coinbase global scams, how they work, and what you must do if you are a victim.

What is Coinbase?

Coinbase is a digital assets exchange platform that allows clients to buy, sell, and store various cryptocurrencies such as Bitcoin, Ethereum, Solana, Ripple, and Tether. Founded in 2012, it has become one of the most popular and widely used crypto exchanges in the world. 

The platform provides crypto investors and traders with a user-friendly interface and a range of neat features that make it easy for both beginners and seasoned users to participate in the crypto market.

Coinbase takes pride in its tight security measures. The platform stores the majority of users’ funds in offline (cold) storage, which helps protect against hacking and theft. The company also offers an additional security layer in the form of insurance for digital currency stored on its servers. 

Lastly, the exchange complies with regulatory requirements in the jurisdictions in which it operates, which helps to ensure that the client’s funds are protected and that the platform operates transparently. Problems arise once fraudsters create a Coinbase fake account and start phishing.

Coinbase Reviews

In a relatively recent Reddit thread, one user asked the community if Coinbase was a scam.

“I wired $500 and purchased equivalent BTC a week ago. My balance now says ~$530. My available to send say $9. I needed to make a purchase for roughly $100. WTF,”

the Redditor claims.

The user then went on to update his post, saying “Definitely an scam,” accusing Coinbase of skimming a huge percentage of the principal off the top, locking the transferred money down in digital assets without providing settlement statements.

Another Redditor replied, “I’ve been using my account with Coinbase since 2016. 2 months ago they decided they needed more security and to verify who I am despite them having all of my u for the last 7 years. They have my funds frozen for almost 3 months.”

Other comments stood up for Coinbase, claiming “They are not a ‘total scam’ because they put a hold on a few hundred of your dollars (which is standard practice, btw, especially for new customers),” but still implying that there may be some shady activity. With multiple users reporting the same issues, there must be something there.

Coinbase Withdrawal Issues

According to an article from a few weeks ago, Coinbase users have been experiencing withdrawal issues that have left many angry with the platform’s customer support. They have reported delays in withdrawing their funds, with some transactions taking several days to process. 

Whether these are system issues or a Coinbase account scam, remains unknown. Clients have complained about the lack of responsiveness from the platform’s support, expressing frustration over the transparency regarding their withdrawals.

How Scammers Use Coinbase to Get Your Crypto?

Digital con artists have devised various tactics to target unsuspecting cryptocurrency holders through the exchange. One method involves creating fake brokerage websites to convince clients to transfer their crypto assets into a Coinbase wallet, claiming it is a safer option. 

This way, they leverage the exchange’s status. Once the transfer is made, the financial swindlers vanish, disregarding the promises they made. This is known as the Coinbase wallet scam.

Another deceptive tactic involves fake brokers who use stolen credit card information to make purchases on the platform. They then sell the purchased cryptocurrency for fiat currency and thus launder the stolen money. Scammers also create fake Coinbase websites that mimic legitimate pages to trick users into entering their login credentials. 

Coinbase Mining Pool Scam

The company has issued a security alert regarding the Coinbase mining pool scam targeting self-custody wallets. Virtual tricksters are deceiving users into directing their hash power to mining pools that falsely promise high returns. 

Once connected, these pools can manipulate transactions and potentially steal funds. “Attackers will remove USDT from the victim’s wallet and the scam site will show that their balance is increasing. Scammers will frequently reassure victims that if they add more funds, they will get more USDT in returns by mining,” the alert points out.

Phishing Attacks on Coinbase

Phishing scams represent another prevalent online threat, where scammers send emails or messages pretending to be from Coinbase, asking for sensitive information such as login credentials or personal details. 

In this variant of the Coinbase email scam, fraudsters aim to use the obtained information to access the victim’s account and steal their crypto assets. “Coinbase employees will NEVER ask you to share your password, 2-step verification codes, or private keys. If someone claiming to be from Coinbase asks you for this information, it is a scam,” the exchange stresses.

What to Do If I Was a Victim of a Coinbase Scam?

Hope is not lost for those who have lost their crypto due to trusting cyber crooks. It is important to recuperate and make sure the scheme gets exposed. If you have fallen victim to a Coinbase crypto scam, there are several key steps you should take to fix the situation:

• Report the scam to Coinbase: Explain to the exchange’s customer support what happened and request immediate action.
• Inform your bank about the incident: In case the fraudsters have obtained your financial information and are making unauthorized transactions, tell your bank to freeze your account(s).
• File a complaint with the relevant regulatory authorities: Contact financial market watchdogs such as the SEC or the FCA or law enforcement agencies such as the FBI and file a complaint with their services. Present them with strong evidence to help them shut down the scam. They may also be able to help you get your money back.
• Consult with a qualified attorney: Explore your legal options. You may be able to press charges against the fraud.
• Hire a chargeback company: Getting your stolen crypto back is possible with CipherTrace. You will need professional aid, though.

Book a free consultation with Scam Brokers Reviews and explain how you got scammed. We boast a team of experts who handle fund recovery cases daily, regardless of whether victims have lost real money or digital assets.