Thomas Daniels
Coinbase has issued a stark warning about the growing wave of online scams targeting younger users, especially those in Generation Z. In a blog post published on October 8, the cryptocurrency exchange outlined key threats—social media fraud, romance scams, fake websites, and recovery schemes—urging users to remain vigilant.
The platform emphasized that in the world of cryptocurrency, users bear full responsibility for securing their assets. Unlike traditional banking, where institutions provide certain layers of protection, cryptocurrency owners act as their own custodians, positioning themselves as both the first line of defense and the biggest security risk.
Social Media Scams
A major focus of Coinbase’s warning is the rise of scams proliferating across social media platforms such as Instagram and TikTok. Fraudsters often create fake profiles or impersonate high-profile individuals to promote fake investment opportunities. While these offers may appear legitimate, they are almost always fraudulent.
Coinbase advises users to be cautious of unsolicited messages from strangers encouraging cryptocurrency investments. A notable example occurred in Vietnam, where five individuals were arrested for defrauding victims of over 17.6 billion Vietnamese dong ($700,000). The scammers used social media to establish fake romantic relationships, persuading their targets to invest in a fraudulent crypto platform.
Romance Scams and Fake Websites
The rise of romance scams, also known as “pig butchering” scams, was another key concern addressed by Coinbase. These scams typically involve perpetrators posing as love interests on dating apps or social media to exploit victims financially after gaining their trust.
Fraudsters also rely on fake websites that mimic legitimate platforms to deceive victims into sharing personal information or sending funds. These counterfeit sites often feature subtle URL discrepancies but are convincing enough to mislead unsuspecting users.
On October 3, a U.S. citizen filed a lawsuit after losing $2.1 million in Bitcoin due to a pig butchering scam. The victim was lured into using a fraudulent crypto exchange website, which was part of a scam operation based in Southeast Asia. This case highlights Coinbase’s warnings about the sophisticated tactics scammers use to manipulate victims.
Boosting Awareness and Reporting Scams
According to Coinbase, over 67,000 online scams were reported in 2023, with median losses of $3,800. Coinbase encourages users to remain proactive in reporting suspicious activity to both law enforcement and the platforms involved. Greater awareness, coupled with prompt reporting, can prevent others from becoming victims of similar schemes.
As the cryptocurrency market continues to grow, so do the associated risks. Coinbase’s message to Gen Z is clear: safeguard your assets, stay alert to online threats, and help protect the wider crypto community by reporting fraud.
