The post How an insider-led breach sparked a costly scam at Coinbase appeared on BitcoinEthereumNews.com.

Alliance DAO contributor Qiao Wang has detailed a sophisticated social engineering scam targeting Coinbase users amid the firm’s insider-led data breach incident. In a May 15 post on social media, Wang revealed how attackers impersonate exchange staff using personal data obtained through a recent internal breach. Individuals contacted him, claiming to represent Coinbase and warning of a supposed compromise on his account before conducting identity verification steps.  The impersonators requested details about account balances to prioritize high-value targets, then instructed victims to transfer assets to a Coinbase Wallet.  Under the guise of assisting with wallet setup, the attackers provided a pre-generated seed phrase, giving them full control once the user moved the assets.  Wang said he called the scammers out at the end of the call: “I called them out at the end of the call telling them they need to step up their game cuz this scam is retarded. They told me [they] had made $7m that day.” Personal security at risk Coinbase disclosed earlier on May 15 that it experienced a data breach affecting less than 1% of its monthly active users. The incident, which the company said did not compromise login credentials or private keys, was traced to the bribing of a group of overseas customer support agents to leak sensitive data.  Information included names, contact details, identity documents, and masked banking and social security data. According to a statement, Coinbase terminated the involved insiders and is cooperating with law enforcement to investigate the breach. CEO Brian Armstrong confirmed that the attackers attempted to extort $20 million in Bitcoin from the company, a demand that Coinbase rejected.  Instead, the firm is offering a $20 million reward for information leading to the perpetrators’ arrest. Coinbase also stated it will reimburse affected users. Despite the reimbursement promises, Wang called…

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Filed under: News - @ May 15, 2025 6:23 pm