Coinbase's Crypto Crisis: $65M Stolen, Users Left Vulnerable

Coinbase, a leading cryptocurrency exchange, is facing mounting criticism and regulatory challenges as it grapples with rising crypto scams and fraud. The platform has been accused of failing to address security vulnerabilities that have led to significant user losses, with estimates suggesting that over $65 million was stolen from Coinbase users in just December 2024 and January 2025 alone.

Blockchain investigators ZachXBT and tanuki42 have highlighted several long-standing security issues on Coinbase, including exploits of old API keys, verification code-related bugs, and inadequate monitoring of stolen funds. They also criticized Coinbase's compliance practices, stating that the company fails to properly report scam addresses in widely used compliance tools, making it easier for bad actors to operate undetected.

Coinbase's customer support has also come under scrutiny, with complaints about "useless customer support agents" and a lack of assistance for users outside US time zones. The situation has become so lucrative for scammers that one self-proclaimed Coinbase phishing scammer revealed in a November 2024 interview that they make a minimum of five figures a week by targeting specific demographics.

In response to these allegations, Coinbase has yet to officially respond. However, the exchange must address its systemic security failures before more users fall victim to increasingly sophisticated scam operations. Crypto users are advised to remain vigilant, double-check all communications, and never share sensitive information with supposed "support agents"—even if they claim to be from Coinbase.

In related news, Coinbase is intensifying its efforts to secure clear regulatory approval for US banks to provide services to cryptocurrency businesses. The exchange has formally urged the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC) to confirm that banks are allowed to engage in crypto-related activities without restrictions.

Coinbase's regulatory push is backed by three prominent US law firms, which assert that current federal laws already allow banks to engage in crypto services and collaborate with third-party providers like Coinbase. Despite this, Coinbase emphasized that regulatory confirmation is essential to remove any lingering doubts in the banking sector.

The role of traditional financial institutions in the cryptocurrency industry has been a subject of intense debate. While major banks like BNY Mellon have advanced plans to offer crypto custody services,