Blockchain researcher ZachXBT announced today that he helped recover approximately $275,000 worth of cryptocurrency for a Coinbase user who was the victim of a social engineering scheme.
Cryptocurrency Scams Shift from Hacking Incidents to Physical Incidents
During his investigation, he discovered another $5 million worth of stolen Bitcoin and Ethereum linked to the same scam.
“In April 2024, an elderly victim from the US was targeted by Indian phone scammers pretending to be Coinbase support, resulting in the theft of a large portion of his life savings,” ZachXBT shared on X (formerly Twitter).
Details of how the stolen funds were frozen remain unclear. Reports suggest that the victim had stored funds on a Ledger hardware device but was persuaded to transfer them after being misinformed by the scammers that their exchange account had been compromised.
However, in one case, due diligence confirmed that Coinbase had not issued any legitimate security alerts matching the scam pattern described by ZachXBT.
According to ZachXBT’s findings, on August 10, a day after the scam took place, around 15 BTC was transferred to an unnamed centralized exchange and then moved to the Tron blockchain. In addition, around $200,000 worth of USDT was sent to a separate over-the-counter (OTC) desk.
Analytics firm Chainalysis reported that overall illicit activity on-chain decreased in the first half of 2024 compared to the previous year, while stolen funds and ransomware incidents increased. “Specifically, stolen funds inflows nearly doubled from $857 million to $1.58 billion, while ransomware inflows increased by approximately 2% from $449.1 million to $459.8 million,” the firm said in its mid-year report.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have issued warnings about the increasing prevalence of crypto scams, particularly “pig butchering” scams with elaborate trust schemes.
Last month, ZachXBT disclosed that it was involved in a law enforcement investigation that uncovered a hacking group responsible for stealing $243 million from a single individual.
*This is not investment advice.
