Over the past year, large numbers of people have lost tens of millions of dollars in cryptocurrencies as scam gangs took their money from their Coinbase accounts.

Victims blame Coinbase
According to the Wall Street Journal report, a group of about 100 people who lost their assets in the cyber attack blames Coinbase for their losses, saying the company did not do enough to protect themselves. The group says victims have repeatedly notified the company to fix flaws in Coinbase Wallet software that mistakenly allowed scammers access to their accounts.

“They have no infrastructure, they are trying to be a financial institution”
“They’re trying to be a financial institution without the infrastructure to support it,” said Eric Rosen, an attorney at Roche Freedman, who represents 96 victims in litigation-like arbitration claims against Coinbase.

Rosen stated in his statement that there is no procedure to stop these scams, emphasizing that most of the victims lost their savings because of this.

The arbitration request states that rules requiring banks to refund debit card users for unauthorized transfers should also apply to Coinbase’s customers.

Those who went to arbitration, some of whom were defrauded until August, say they lost more than $21 million in total.

Earlier this year, the company said it was working with law enforcement and regulators to deter scams.

How were they scammed?
Unlike other scams where someone is tricked into sending money somewhere, in this case individuals’ money was stolen directly from their accounts. The scammers told victims that after meeting them on social media, dating apps, or sending the wrong number, they could earn high returns through “liquidity mining”. For this, the investor candidate had to purchase a “mining certificate” by clicking on a command that said “confirm payment” in Coinbase Wallet.

The certificate was not genuine and the transaction did not really involve a payment. Clicking here recorded a line of computer code that allowed scammers to steal crypto deposited into an account weeks or months later.

Lawyer Rosen said, “They had no procedures to stop these scams. They didn’t even look like they tried. Of course, the scammers quickly noticed this and directed victims to download the Coinbase wallet.” he said.

Saying that he lost 77,000 dollars due to the fraud he experienced, James Osbun said, “I blame Coinbase even more than the fraudsters. Because scammers couldn’t be effective without Coinbase,” he said.