The investing community has expressed increasing discontent in recent times about the alleged restrictions and blocks enforced by the renowned US-based cryptocurrency platform, Coinbase. These disgruntled declarations surfacing on the social media app, platform X (formerly known as Twitter), have started turning heads towards the risk management strategies followed by Coinbase and their efficacy in guarding clients from becoming targets of social engineering scams, notorious for costing customers a hefty sum of over $300 million per year on average.
Cryptocurrency Losses Worth $65 Million Amid Heightening User Complaints
According to investigations spearheaded by crypto analyst ZachXBT, the surging account issues seem to emanate from Coinbase’s “aggressive risk models”. These models seem to prioritize rigid security protocols, which unfortunately end up compromising user freedom and flexibility.
While examining Coinbase’s withdrawal data, ZachXBT uncovered shocking facts – over $65 million had been fraudulently taken from user accounts between December 2024 and January 2025. It’s crucial to understand that this amount is likely only a section of the overall losses incurred by users.
Among the many cases, one stands out due to its high loss magnitude and the sheer audacity of the scam employed. A crafty scammer using a falsely copied phone number and personal data gathered from breached databases managed to earn the trust of an unsuspecting user and conned him out of around $850,000.
Rising Criticism Towards Coinbase’s Lack of Proper Action
Counterfeiters are reportedly designing nearly perfect replicas of the official Coinbase platform, allowing them to send phishing emails that look alarmingly authentic, thereby increasing their chances of success. Social media platforms such as Telegram have seen the setup of multiple channels where such cybercriminals freely market their fraudulent tools.
The onus of these security lapses lies primarily on Coinbase’s leadership, which many users criticize for failing to effectively resolve the root of the issue. However, as ZachXBT points out, the situation is far from one-dimensional. A lot of users report severe lack of support from Coinbase’s end. They often end up dealing with customer service representatives who seem at a loss when it comes to offering substantial help.
Furthermore, Coinbase’s team faces criticism for their unavailability outside US office hours, in stark contrast to the 24/7 nature of cryptocurrency trading. This alienates many users and adds to the mounting challenges they face.
With these hurdles in the limelight, proposed solutions range from formulating account settings that increase security for experienced users to boosting outreach and educational resources for those less knowledgeable about cyberspace security nuances. Additionally, initiating legal proceedings against these deceptive scammers and the tools they use could serve as a sufficient deterrent and signal dedication towards user security.
Removing the reference to the 1D chart showing COIN’s stock price, along with any image captions, the article concludes by suggesting that Coinbase must take drastic actions to enhance user trust and security.
FAQs
1. Why is Coinbase facing criticism from users?
Coinbase is facing criticism due to alleged account restrictions and blocks, along with reported failures in adequately handling user complaints and preventing scams. The customer service is also under attack for its inadequate assistance.
2. What are the proposed solutions to Coinbase’s issues?
Suggested solutions range from designing account settings that strengthen security for seasoned investors, to bolstering outreach and educational resources for those less savvy about internet security. Legal action against scammers and fraudulent tools is also proposed.
3. How much money was reportedly stolen from Coinbase?
Investigations have revealed that over $65 million was fraudulently taken from user accounts between December 2024 and January 2025. However, this amount is likely just a portion of the overall losses.
4. How do scammers trick Coinbase users?
Scammers often create replicas of the official Coinbase platform, enabling them to send phishing emails that look remarkably legit, increasing their success likelihood. They also manipulate personal data from breached databases to gain the trust of users.
