Award-winning Sleuth ZachXBT has revealed a serious fraud problem on Coinbase, the largest crypto exchange in the United States.
The onchain Security Expert whose work has helped recover millions of lost crypto assets believes the Coinbase exchange is quickly becoming a fraud hotbed.
ZachXBT revealed that Coinbase Users lose $150 million to theft only. He believes the number lost is much higher than $150 million as the figure comes from thefts he confirmed alone.
The revelation by the Onchain security expert follows a recent fraud case on Coinbase, in which a user lost $11.5 million.
The victim was socially engineered by the threat actor, who immediately swapped, bridged, and laundered the stolen funds through several exchanges.
The Funds stolen were BTC, a surprising choice given that major hackers have been targeting Ethereum in their heist.
The Wazir X hacker and Bybit Hacker all chose Ethereum, raising questions about why the asset is fast becoming a token of choice for hackers.
Coinbase Timeline of Security Breaches
Coinbase, just like most decentralized exchanges, has had its fair share of breaches through the years. The exchange has had only two major breaches, leading to the exposure of customer data and loss of funds.
SMS-Based Two-Factor Authentication Breach
In the second quarter of 2021, The Record reported that over 6,000 Coinbase users were affected when attackers exploited a vulnerability in Coinbase’s SMS-based two-factor authentication system.
This breach facilitated unauthorized access to user accounts and led to unauthorized fund withdrawals.
2024 Third-Party Bank Breach
In July 2024, the personal information of 154 Coinbase customers was exposed following a security incident at a bank associated with Coinbase
The breach was traced back to a compromised Snowflake cloud database, highlighting vulnerabilities in third-party integrations.
Healthy Revenue Despite Security Challenges
Despite the breaches, Coinbase continues to record healthy revenue. In 2024, Coinbase Global, Inc. reported a total revenue of $6.6 billion, a significant increase from $2.93 billion in 2023.
The company’s net income for 2024 was $2.6 billion, substantially rising from the $95 million net profit recorded in 2023. Coinbase’s main competitor is Binance.US since its target market is mostly the United States.
