Fake Coinbase Texts Led to $900K Bitcoin Theft, US Seeks Seized Crypto

The texts allegedly induced the beneficiary to share a login, password, and other details that gave the scammers access to both wallets. All 33.7 bitcoin then moved to other wallets without the owners’ knowledge or consent, the affidavit states. Coinbase’s account security instructions state that its staff will never ask customers for passwords or two-step verification codes.

Investigators Traced Part of the Bitcoin to Binance

Investigators followed 11.2 of the stolen bitcoin to a Binance account through transactions made between June 5 and 15, 2023, according to the affidavit. Bitcoin deposited there was quickly converted to monero, a cryptocurrency designed to conceal transaction details. About 75% of the converted monero left the account, while attempts to withdraw the remaining balance were rejected.

Binance froze the account at the Federal Bureau of Investigation’s request. It held approximately 758.55 monero when frozen, the filing states. Massachusetts prosecutors traced fraud proceeds to Binance accounts in a separate forfeiture action in 2023. The Sept. 28 filing concerns assets linked to the beneficiary’s and trust’s Coinbase wallets.

Criminals have used Coinbase’s name in other thefts, although the methods have differed. In a separate impersonation scheme, a man persuaded users to move cryptocurrency into wallets he could access. The Massachusetts complaint instead alleges that fraudulent texts obtained credentials used to enter an existing Coinbase account.