Coinbase faces allegations of lax security, users lose more than $46 million

Event timeline

Since early March, a number of Coinbase users have fallen victim to sophisticated phishing attacks. According to a prominent blockchain investigator, the incidents have resulted in the theft of more than $46 million in total, including one notable case in which a single user lost 400 Bitcoin (BTC) — equivalent to about $34.9 million at current market prices. The perpetrators are believed to have used tactics such as email spoofing or psychological manipulation to deceive users and drain their accounts.

The investigator pointed out that Coinbase did not appear to be responding to this wave of scams. Fake “Coinbase Security Alert” emails claiming to warn of a compromised account have tricked many victims into transferring assets to hacker-controlled wallets or adding the attacker’s wallet address to a trusted list. What is worrying is that Coinbase’s security systems failed to detect or block these unusual transactions.

Security Vulnerability and Coinbase Liability

The incident highlights weaknesses in Coinbase’s customer protections. Despite being a large exchange with millions of users, Coinbase appears to have failed to improve its security measures quickly enough to deal with increasingly sophisticated attacks. Experts say the fact that bad actors were able to withdraw funds easily after bypassing the whitelisting system shows a serious flaw in the risk control process.

Coinbase’s customer support has also been heavily criticized, with many victims reporting that they did not receive timely assistance after losing their assets, with some even waiting weeks without a response. This raises questions about the exchange’s ability to respond to emergencies – a key factor for a 24/7 platform in the cryptocurrency space.

Community and market response

News of the incident quickly spread through the cryptocurrency community, especially on social media platforms like X, where users expressed outrage and concern. Some argued that Coinbase should be held responsible for the damages, while others stressed that users should be more vigilant against scams. However, most of the criticism was directed at Coinbase, arguing that such a large exchange should have better security.

Market-wise, the incident could have a negative impact on Coinbase’s reputation, which has been plagued by scandals in the past ranging from legal issues to security incidents. Given the fierce competition from rivals like Binance and Kraken, how Coinbase’s leadership handles this crisis will be a major test.

The loss of over $46 million from Coinbase users in March 2025 was an alarming event that exposed the vulnerabilities in the system of one of the world's largest exchanges. Although the main cause was sophisticated fraud, Coinbase's responsibility to protect customers cannot be underestimated. How the exchange handles the aftermath and improves in the future will determine whether it can regain the trust of the community. Meanwhile, the incident is also a reminder that in the world of cryptocurrencies, full of potential but also full of risks, no one can afford to be complacent.