Imagine this: you're a teacher, finally deciding to dip your toes into crypto, lured by the promises of a secure financial future. You pick Coinbase—you know the name, you trust the name, it looks like a legitimate platform. Then one day, an email that seems completely legitimate shows up. Instead, you could get a very persuasive voice on the other end of the line walking you through a set of critical actions. Next thing you know, your money vanishes into the streaming void. That money was supposed to be your retirement and your children’s education. All that’s left are the betrayal hangover’s familiar sting of hurt disappointment and the bitter aftertaste of regret.

This isn't just a hypothetical scenario. Not only is it happening — it’s happening on a completely unprecedented scale. Coinbase users have already been fleeced out of hundreds of millions of dollars by these increasingly sophisticated social engineering scams. We’re now talking well over $100 million in just the first quarter of 2025 alone!

Whose Fault Is It Anyway?

Let’s face it, most of us have posted some cringe-inducing stuff online. Clicked a shady link, succumbed to a phishing email. We’re human. But come on, is it truly fair to put all the blame on the victims in this case? To basically just throw up our hands and say, “Oh well, they should have planned better?

It’s convenient to shout blame and yell about individual accountability. And yes, user education is critical. Coinbase provides things like a “scam quiz” and pushes users to set up “allow lists” (safelists) of approved recipient addresses. But let's be realistic: a quiz isn't going to stop a determined scammer armed with stolen personal data and a silver tongue. Even these safelists could be circumvented with enough game playing, as seen by that recent $850,000 loss case.

Not Just Education, Protection Matters

Think of it like this: you wouldn’t leave your front door unlocked in a high-crime area, would you? You would want to see the cops out on street patrol and solving burglaries. You wouldn’t settle for just trusting your own watchfulness. So why are we giving Coinbase such a huge free pass here?

The uncomfortable truth is this: Coinbase, as a custodian of billions of dollars worth of digital assets, has a moral – and potentially legal – obligation to protect its users. Saying, "Industry-wide collaboration is the solution," like their CISO Jeff Lunglhofer does, feels like a cop-out. Picture a bank requiring all of customers to band together to fight fraud. Rather than adopting better security practices themselves, they leave it up to their customers to do so.

Where's the User Insurance Policy?

Here's a question that keeps me up at night: Why doesn't Coinbase offer an insurance policy for users who fall victim to social engineering scams? Traditional financial institutions insure against fraud. Why not crypto exchanges?

I know what you’re thinking: "Insurance would be expensive!" "It would incentivize risky behavior!" Maybe. Can’t the alternative – like leaving our most vulnerable users financially devastated – be worse?

Consumers will be far more eager to explore new experiences in crypto once they feel secure.

Coinbase likes to promote their efforts such as “Tech Against Scams” and Crypto ISAC. They communicate theft addresses to other exchanges. They take down spoofed content. All good things. These are all reactive measures, constantly playing whack-a-mole with an increasing army of scammers. What about proactive measures?

  • More sophisticated fraud detection systems.
  • Stricter identity verification protocols.
  • Real-time transaction monitoring with human intervention.
  • A dedicated team to assist users who suspect they've been scammed.

Yes, an insurance policy—albeit one with premiums and exclusions.

The Outrage Tax

Coinbase is a publicly traded company. It generates massive revenue. It can afford to do better. The truth that they aren’t is, quite frankly, scandalous.

This inaction isn’t primarily a technical problem—it’s a political one. It’s indicative of the larger trend of corporations choosing profits over people—including in the current Wild West of crypto.

We, the users, have the power to change this. We can demand better protection. And if they won’t, we can vote with our feet and take our business to exchanges that keep security first. We should hold our elected officials to account and call for more stringent regulatory scrutiny of the crypto ecosystem.

This is more than Coinbase’s $300 million write down. It's about the future of crypto. It’s the future of a financial system that invests in us all rather than one that feeds on our most vulnerable.

What do you think? Victim or the problem One of these things is not like the other. Use #CoinbaseScams #CryptoSafety to join the debate!

What do you think? Are you the victim or are you the problem? Use #CoinbaseScams #CryptoSafety to join the debate!