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- CoinBase users got scammed for about $21M from their wallets.
Currently, Scammers are entering social media and dating platforms, Facebook, WhatsApp, and several others to forcefully convince users to download Coinbase Wallet.
Once the user downloads the wallet, the scammer will send links to fraudulent websites, influencing the users to purchase the “voucher.” which claims to be a safe transaction protected by an authorised platform. However, it was only a malicious smart contract.”
Frightened users eventually found that the smart contract gave “scams full access to the entire funds in the victim’s wallet” without requiring authorization to withdraw funds.
Approximately 100 people worldwide are demanding to pay publicly traded Coinbase for allegedly not taking appropriate steps to protect their users.
Users blamed Coinbase was not influenced by reports that scammers emptied accounts of tens or hundreds of thousands of dollars worth of cryptocurrency. The users taking legal action have collectively lost $21million.
The users said they had informed the company earlier and termed it a Security flaw. According to a recently filed arbitration demand, instead of acting to protect users, Coinbase “has not taken any corrective steps to correct the security flaw or warn customers about other security risks, despite this.” warned about the big problem.” This reportedly allowed “hundreds” of more users to become targets of an “easily preventable” liquidity mining pool scam.
In an interview with The Washington Post, Eric Rosen(A lawyer from Roche freedman LLP, the firm representing users) mentioned that “They didn’t ever appear to try,” adding more he stated, “Of course, scammers quickly picked up on this, and literally directed victims to download the Coinbase Wallet.”
A Legitimate Liquidity Mining Pool guarantees users get high returns on buying vouchers for a small amount of money, making it appealing to those new to crypto, but for Coinbase Wallet users, “click on these intuitive looking vouchers.” Doing so will record a line of computer code it provides to the scammer.
A Legitimate Liquidity Mining Pool guarantees users get high returns on buying vouchers for a small amount of money, making it appealing to those new to crypto, but for Coinbase Wallet users, “click on these intuitive looking vouchers.” The Post noted that Doing so will record a line of computer code it provides to the scammer. Allowing cryptocurrency deposited in an account to be stolen weeks or months later.”
This matter differs from other crypto scams that trick users into authorising fraudulent transactions. The claimers alleged that the terms of Coinbase do not warn about this risk, instead assuring users who merely share a secret passcode could compromise an account.
Response of CoinBase on Recent Scam
The Washington Post reported that, since Legal action was previously threatened, Coinbase has modified its ways and now alerts users when ” a website is demanding authorization to withdraw a huge amount of dollars from an account,” This kind of warning was already prevalent on competing for a product from Coinbase wallets such as MetaMask and trust Wallet.
While talking to a crypto news outlet, Jordana Haviv, another user solicitor, noted, “In our view, this is effectively an admission that Coinbase wasn’t doing enough to protect its customers.”
Jordana said that an arbitrator might be appointed in the upcoming weeks, or maybe in a month, and coinbase would be allowed to reply to the allegations. After that, the discovery might begin.
Users lawfully fighting against Coinbase hope the arbitration ends in the long-sought retrieval of lost money, which to some amounted to their entire.
Coinbase said that its product is already working to prevent liquidity mining scams.
In an interview with a news outlet spokesperson of Coinbase, Lisa Johnson mentioned that “Coinbase is committed to protecting its customers from scams, fraud, and other crimes and has invested significant resources in protecting users against liquidity mining scams.”
Lisa further notes that “A customer’s activities on Coinbase Wallet, including managing the wallet’s private security keys and access to the wallet’s contents, are exclusively controlled by the customer, not Coinbase,” “That is why Coinbase provides customers with multiple product offerings, so they can choose the products that are best for them.”
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
