How A Coinbase User Lost $11.6 Million 10 Minutes After Bitcoin Purchase

Scams in the crypto space have recorded a meteoric rise with the bull rally and one Coinbase user has suffered a tremendous loss after falling victim to one of these scams. The user had fallen victim to the phishing scam that saw him lose millions in crypto to the scammer in a matter of minutes. These kinds of scams have been on the rise. Users in the space are often warned about phishing scams. However, this has not been enough to prevent users from falling for the scams.

Crypto exchanges have taken various measures in the past to mitigate the risks of accounts getting compromised. But in the end, it is up to users to make sure that they implement these measures to prevent scammers from accessing their accounts. In the case of this user, a temporary lapse in judgment had caused them to lose $11.6 million in crypto to scammers.

How The Scam Happened

Per lawsuit filings that were acquired by Business Insider, the user received a notification that their account had been locked after they had purchased 200 bitcoins. A phone number was attached to the notification prompting the user to contact Coinbase’s customer service to rectify this. The user proceeded to call the number, which would prove to be the first step into an unfortunate situation.

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Upon contact, the user identified only as G.R. in the court filings was instructed to make a number of changes to his account’s security measure. G.R. complied with the requests believing that the person they were in contact with was a customer service rep of Coinbase. One of the changes made to the account provided the person on the other end of the line remote access to the account.

The scammer then proceeded to increase the daily transaction limits on G.R.’s account, also deactivating notifications and alerts. Once this was done, the scammer had then moved bitcoins and Stellar (XLM) totaling approximately $11.6 million out of the account in a matter of moments. By the time G.R. realized what had happened, the scammer had made away with the crypto in his account.

Recovering The Bitcoin And Lost Funds

The scammer had moved the stolen funds into several accounts following the heist. According to the lawsuit, 10.2 bitcoins, about $600,000, were transferred to an account on Huobi Global. A forfeiture notice was then filed by investigators in a bid to recover the bitcoins that were sent to the Huobi Global account and in October, Judge Dolly M. Gee gave approval. A notice was also posted to see if anyone else would lay claim to the BTC in the account other than G.R.

BTC price trading above $61K | Source: BTCUSD on TradingView.com

Investigators are still working towards resolving the case. However, there have been no arrests or charges in relation to the case. There have been no indications as to the recovery of the remainder of the loot besides the $600,000 in bitcoin sitting in the frozen Huobi Global account.

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Coinbase and Huobi Global declined requests to comment on the case and subsequent investigations. Nevertheless, investigators continue to work with G.R. to try to recover the lost crypto. G.R. may not be able to get back the entirety of his lost funds. However, his case will serve as a warning to other users. Exchanges provide security measures but it is up to the users to make sure that they stick to the measures provided.

Featured image from Technext, chart from TradingView.com