Coinbase and Gemini Users Fall Victim to Scammers

Cryptocurrency users are receiving fraudulent emails from senders posing as representatives of crypto exchanges Coinbase and Gemini. The scammers trick them into creating a new wallet with ready-made recovery phrases.

The scam emails mention a class action lawsuit against Coinbase that caused the exchange to sell all “unregistered securities,” forcing users to manage their wallets themselves. The scammers say Coinbase will operate as a registered broker and traders will continue to trade, but all assets must be transferred to a new wallet.

In this regard, the exchange's clients are encouraged to switch to self-service wallets and are provided with instructions on how to download a legitimate Coinbase wallet. Along with this, traders are given pre-generated seed phrases. The deadline for switching to the new wallet is April 1.

However, once users transfer their crypto assets, they become available to attackers. Coinbase has warned that it will never send users a seed phrase, and customers should not enter recovery phrases provided by third parties.

A similar seed phrase scam is being used by scammers using the name of the American crypto exchange Gemini. The scammers convince its users to create a new wallet by mentioning Gemini's lawsuit with the US Securities and Exchange Commission (SEC), which previously accused the platform of offering unregistered securities through the Gemini Earn lending program.

In February, the U.S. regulator dropped its investigation into Gemini and stopped short of recommending enforcement action against it. However, the SEC has warned that it could resume prosecution of the exchange if necessary.

Источник: cryptocurrency.tech