Coinbase users suffer huge losses amid ongoing security vulnerabilities
Coinbase users suffer huge losses
Cryptocurrency exchange Coinbase is facing mounting criticism after independent investigators exposed severe security lapses leading to hundreds of millions of dollars in annual user losses.
Investigators ZachXBT and tanuki42 reported that Coinbase customers lost more than $65 million in December 2024 and January 2025 alone, according to Cointelegraph.
Their findings, based on on-chain data and user reports, suggest that the actual losses could be much higher, as they do not account for police reports or Coinbase’s internal support records.
Ongoing scams and Coinbase’s alleged negligence
The investigators found that many scams were linked to social engineering schemes, often orchestrated by threat actors in India and primarily targeting U.S. based customers. These scammers reportedly exploit outdated Coinbase API keys, verification code vulnerabilities, and inadequate theft detection measures.
Despite Coinbase’s public warnings against using virtual private networks (VPNs), the investigators noted that phishing sites run by scammers actively block VPN access, suggesting that the exchange has failed to diagnose the root cause of the problem.
Critics have also pointed to Coinbase’s failure to flag known scam-related addresses in compliance tools and its lack of responsive customer support, particularly outside U.S. time zones. ZachXBT urged Coinbase to take urgent action, warning that users continue to be scammed for tens of millions of dollars each month.
Coinbase has yet to respond to the allegations. The latest findings raise concerns about the security of centralized exchanges, reinforcing the need for stronger protections against sophisticated cyber threats in the crypto industry.
Meanwhile, according to a forecast by Bitwise, Coinbase’s stock is expected to surpass $700 per share by 2025, potentially making it the world’s most valuable brokerage, overtaking Charles Schwab. With shares currently trading above $302, the price would need to more than double to reach that target.
