Coinbase Users Face $150M+ Loss Annually Due to Privacy Issues
According to ZachXBT, over $150 million is stolen annually from Coinbase users, highlighting significant privacy issues in the US. ZachXBT emphasizes that Coinbase needs to hold compromised tools like TLOxp or Telcos accountable and improve support for scam victims, citing a lack of legal action against threat actors. This situation impacts traders who are vulnerable to scams due to inadequate corporate responses.
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On January 17, 2025, a significant issue regarding user security at Coinbase was highlighted by ZachXBT, a prominent figure in the cryptocurrency security community. According to ZachXBT's tweet at 10:45 AM EST, over $150 million is estimated to be stolen from Coinbase users annually due to compromised private tools like TLOxp and vulnerabilities in telecommunications systems. This revelation has caused a notable stir in the cryptocurrency market, particularly impacting Coinbase's stock and related cryptocurrencies. As per data from CoinMarketCap, Coinbase's stock (COIN) experienced a 2.3% drop within the hour following the tweet, trading at $215.50 at 11:15 AM EST. Additionally, Bitcoin (BTC), which is heavily traded on Coinbase, saw a slight dip of 0.8%, trading at $45,320 at the same timestamp. Ethereum (ETH) also experienced a 1.2% decline, trading at $3,120 at 11:15 AM EST. These price movements indicate a direct market reaction to the security concerns raised by ZachXBT (Source: CoinMarketCap, January 17, 2025, 11:15 AM EST; ZachXBT, Twitter, January 17, 2025, 10:45 AM EST).
The trading implications of this event are multifaceted. Firstly, the immediate drop in Coinbase's stock and related cryptocurrencies suggests a loss of investor confidence in Coinbase's ability to secure user funds. This is evidenced by the increased trading volumes observed on competing exchanges such as Binance and Kraken. According to data from CryptoCompare, trading volumes on Binance increased by 15% within the hour following ZachXBT's tweet, with BTC/USD volumes reaching 3,500 BTC at 11:30 AM EST. Similarly, Kraken saw a 10% increase in trading volumes, with ETH/USD volumes at 12,000 ETH at the same timestamp. These shifts in trading volumes indicate that traders are moving their assets to perceived safer platforms. Furthermore, the market indicator, the Coinbase Premium Index, which measures the difference in Bitcoin prices between Coinbase and other exchanges, dropped by 0.5% to 0.2% at 11:45 AM EST, suggesting a decrease in demand for Bitcoin on Coinbase (Source: CryptoCompare, January 17, 2025, 11:30 AM EST; Coinbase Premium Index, January 17, 2025, 11:45 AM EST).
From a technical analysis perspective, the impact of ZachXBT's tweet can be observed through various market indicators. The Relative Strength Index (RSI) for Coinbase's stock (COIN) decreased from 65 to 58 within the hour following the tweet, indicating a shift towards oversold territory at 11:15 AM EST. This suggests a potential buying opportunity for investors looking to capitalize on the dip. Additionally, the Moving Average Convergence Divergence (MACD) for Bitcoin (BTC) on Coinbase showed a bearish crossover at 11:30 AM EST, with the MACD line crossing below the signal line, further confirming the bearish sentiment. On-chain metrics also reflect this sentiment, with the Bitcoin Network's active addresses decreasing by 3% to 750,000 at 12:00 PM EST, indicating reduced network activity. The trading volume for BTC on Coinbase itself decreased by 5% to 2,000 BTC at the same timestamp, reflecting a cautious approach by traders (Source: TradingView, January 17, 2025, 11:15 AM EST; Glassnode, January 17, 2025, 12:00 PM EST).
The trading implications of this event are multifaceted. Firstly, the immediate drop in Coinbase's stock and related cryptocurrencies suggests a loss of investor confidence in Coinbase's ability to secure user funds. This is evidenced by the increased trading volumes observed on competing exchanges such as Binance and Kraken. According to data from CryptoCompare, trading volumes on Binance increased by 15% within the hour following ZachXBT's tweet, with BTC/USD volumes reaching 3,500 BTC at 11:30 AM EST. Similarly, Kraken saw a 10% increase in trading volumes, with ETH/USD volumes at 12,000 ETH at the same timestamp. These shifts in trading volumes indicate that traders are moving their assets to perceived safer platforms. Furthermore, the market indicator, the Coinbase Premium Index, which measures the difference in Bitcoin prices between Coinbase and other exchanges, dropped by 0.5% to 0.2% at 11:45 AM EST, suggesting a decrease in demand for Bitcoin on Coinbase (Source: CryptoCompare, January 17, 2025, 11:30 AM EST; Coinbase Premium Index, January 17, 2025, 11:45 AM EST).
From a technical analysis perspective, the impact of ZachXBT's tweet can be observed through various market indicators. The Relative Strength Index (RSI) for Coinbase's stock (COIN) decreased from 65 to 58 within the hour following the tweet, indicating a shift towards oversold territory at 11:15 AM EST. This suggests a potential buying opportunity for investors looking to capitalize on the dip. Additionally, the Moving Average Convergence Divergence (MACD) for Bitcoin (BTC) on Coinbase showed a bearish crossover at 11:30 AM EST, with the MACD line crossing below the signal line, further confirming the bearish sentiment. On-chain metrics also reflect this sentiment, with the Bitcoin Network's active addresses decreasing by 3% to 750,000 at 12:00 PM EST, indicating reduced network activity. The trading volume for BTC on Coinbase itself decreased by 5% to 2,000 BTC at the same timestamp, reflecting a cautious approach by traders (Source: TradingView, January 17, 2025, 11:15 AM EST; Glassnode, January 17, 2025, 12:00 PM EST).
ZachXBT
@zachxbtZachXBT is an Pseudonymous independent on-chain sleuth who is popular on revealing bad actors and scams in the crypto space