Former artist Ed Suman lost over $2 million in cryptocurrency earlier this year after becoming a target of a scam involving an individual impersonating a Coinbase support agent.
Suman, 67, dedicated nearly twenty years as a fabricator in the art industry, contributing to renowned projects like Jeff Koons’ Balloon Dog sculptures, as reported by Bloomberg on May 17 here.
After his retirement, he ventured into cryptocurrency investments, ultimately amassing 17.5 Bitcoin (BTC) and 225 Ether (ETH) — a collection that constituted the majority of his retirement funds.
He secured his assets in a Trezor Model One, a hardware wallet typically utilized by cryptocurrency holders to mitigate the threats of exchange hacks. However, in March, Suman received a text message that seemed to be from Coinbase, alerting him about unauthorized access to his account.
Upon replying, he received a call from an individual claiming to be a Coinbase security representative named Brett Miller. The caller demonstrated proficiency, accurately indicating that Suman’s assets were kept in a hardware wallet.
He subsequently persuaded Suman that his wallet might still be at risk and guided him through a “security protocol” that required him to enter his seed phrase on a site mimicking Coinbase’s interface.
Nine days later, a second caller, asserting to be from Coinbase, repeated the procedure. At the conclusion of that conversation, all of Suman’s cryptocurrency assets had vanished.
Related: Bitcoin surges while Coinbase crumbles: Finance Redefined
Coinbase experiences significant data breach
The scam followed a data breach at Coinbase revealed this week, where attackers bribed support staff in India to gain access to sensitive user data.
Compromised information included customer names, account balances, and transaction records. Coinbase confirmed that the breach affected approximately 1% of its monthly active users.
Among those impacted was venture capitalist Roelof Botha, managing partner at Sequoia Capital. There is no indication that his funds were accessed, and Botha opted not to comment.
Coinbase’s chief security officer, Philip Martin, reportedly stated that the contracted customer service agents involved in the incident were located in India and had been terminated after the breach.
The exchange has also announced plans to allocate between $180 million to $400 million for remediation and compensation to affected users.
Magazine: Arthur Hayes’ $1M Bitcoin tip, an impending altcoin rally: Hodler’s Digest, May 11 – 17