A recent report by cryptocurrency investigator ZachXBT highlights the theft of $34.9 million in Bitcoin from a Coinbase user. This incident is part of a larger wave of fraud, amounting to over $46 million this month.
ZachXBT's Investigation into Major BTC Theft
ZachXBT reported on his Telegram channel that 400.099 BTC were sent to a suspicious address. Other suspected thefts from Coinbase users have been noted recently. The funds are moved from Bitcoin to Ethereum via Thorchain or Coinflip and then converted to the stablecoin DAI.
Scammer Tactics and Security Breaches
Scammers use social engineering, primarily targeting the elderly. Stolen data is used to send fake emails with counterfeit case IDs. ZachXBT claims that Coinbase has faced several security breaches that the company has not publicly acknowledged, including outdated API keys for tax software and sending verification codes to any email address.
Regulatory and Internal Challenges for Coinbase
ZachXBT criticized Coinbase's compliance measures, noting that theft-linked addresses are not flagged in monitoring systems. In 2024, a UK division of Coinbase was fined for AML violations. Security issues are a common concern for many crypto exchanges, as evidenced by incidents like the one with Bybit.
The increasing number of crypto fraud cases highlights the need for enhanced regulatory oversight and internal security measures for exchanges. Regulators like the SEC continue to revise their approaches to crypto regulation and cybersecurity in response to these events.
