The Coinbase Mining Pool Scam is one of those scams that sprung up in 2022 and took a lot of people by surprise. In essence, fraudsters created an app that looked like a popular Coinbase crypto exchange.
Over time, they won the confidence of people with whom they made money in the end. The process is the same as of pig butchering scam. It’s like getting a pig ready for slaughter, which in this case is your wallet and the profits that they promised you.
These clever scammers took advantage of the fact that not all people are experts in crypto mining. They capitalized on the rising popularity of liquidity pools and staking, among other things, and targeted their victims through social media sites such as Facebook, Instagram, Twitter, Telegram, and dating apps as well.
For instance, tricksters might engage in a variety of tricks to exploit people. They can impersonate someone else on dating programs or establish a fake mining plan that would deceive individuals into giving them cash.
This Forex Peace Army forum conversation shows how people might be conned out of their funds by scams involving mining pools.
Forbes reports that Coinbase users who lost $21 million worth of cryptocurrency sued the company for negligence but the company declined, alleging it was not responsible for the stolen cryptocurrencies.
So, what exactly is this scam, and how does it operate?
What is the crypto mining pool?
A crypto mining pool is just like a group of individuals working in unity to generate new blocks. This is done by employing their computers and sharing the rewards among the contributors, depending on how much work each person does.
The crew consists of different positions, such as managers who keep an eye on things like recording what each person has done, splitting up of rewards, along with oversight for the whole process. Miners, who are those who do the work, give small amounts of money as charges to the managers of the pool.
For small investors, mining pools are really useful. They join a group of people sharing similar goals and combining their computers together to increase their chance of creating new blocks successfully.
There are some fraudulent companies that claim to provide cloud mining services through bitcoin mining. Once they get the money you paid them, they will not mine any bitcoins for you.
The scam is often effective because people want to get their hands on this Bitcoin cryptocurrency and while there are real ones, there are also fradulent ones.
This is how people are usually deceived:
Scammers use social media platforms or messages to reach out to victims, promising them an amazing investment opportunity in cryptocurrency. They promise you that if you keep your USDT (Tether) in their wallet, there’s no way it will not grow.
The victims are asked to visit a counterfeit website. These websites can only be opened through a crypto wallet browser or extension. Usually, the fake sites contain false testimonials, fake endorsements, and real-time deceitful payouts, as well as partner lists.
The scam websites often pose as associated with popular crypto brands, including Coinbase, Binance, and MetaMask.
People were excited and trusted Coinbase because of its reputation in the world of cryptocurrencies when such information was broken by Coinbase.
Thus, Coinbase’s entrance into the mining industry was met with a lot of positivity and trust from the crypto community. People hoped that they would make a lot of profit by being part of Coinbase’s mining pool.
However, scammers are always there, trying to come up with new ways to steal money from you. These scammers realized that Coinbase had started something new in terms of mining and took advantage of lots of people, particularly on social sites.
The Mining Pool Scam
Now, here is what it is. That’s basically what you need to be on the lookout for. For example, if a person you don’t know invites you to download the Coinbase Wallet, then this should already raise a red flag.
Next, after setting up your wallet, they will send to you a referral code or an affiliate code, which is not such an abnormal thing in itself but once the link is activated, it means that all has been lost.
Another warning sign will come when they tell you to buy USDT or Tether. This is because Tether is actually a stablecoin that there is nothing wrong with in itself. However, it shows that they are trying to involve you in some mining pool. And how exactly does this mining pool work? The mining pool works in such a way that every six hours it mines Ethereum for you, depending on the volume of Tether in your Coinbase wallet.
If there are people on social media platforms discussing issues relating to crypto currencies and it feels sort of fishy or dubious, for instance, run! It’s like hearing someone speak incoherently during a conversation.
Will this be looked into by Coinbase?
Scammers have become smarter out there and I think Coinbase should consider addressing this issue. They should at least have a cautionary note before paying a gas fee to join a mining pool.
But frankly, I also believe that they should go all out to say that “your crypto will be moved to another wallet if you sign up with us.”
What can we learn from this?
So what does this teach us? First and foremost, if it appears too good to be true, it probably is.
These people will come around asking you these questions “Well, what has your coach done for you? What have others done for you? What did your boss do for you lately?” and end up playing with your emotions like they are making money and you are the loser out there.
And they’re going to tell you, “Invest with me. I’ve got a 100% success rate.” There’s nobody out there who has a 100% success record You just have to be suspicious of that all the time.
You should never trust people you meet for the first time on social media sites. Do not trust strangers anyway. If you are having a conversation with a stranger on the internet and they suddenly begin discussing an investment opportunity, then this should immediately raise alarm bells in your head.
Why would they provide such information if it wasn’t somehow in their own best interest? The same applies to strangers offline.
The friend of a friend whom you met at a dinner party may be okay and just want to give you an advice. However, what about that man who stands around near the food truck close to your office? This guy might not be someone from whom one wants financial advice taken.
What to do if you are a victim of an online mining pool fraud?
That said, it’s not easy to recover from this. Most likely, there is nothing much that can be done, and the best thing for you is to calculate the losses and report them to the FBI, abandon your cryptocurrency wallet, take out any remaining money, and try not to feel embarrassed about it as you move away with lessons.
Secondly, you should contact a crypto scam recovery services as soon as possible and they will fight for you to get your funds back from the scammers.
No matter, you lost Bitcoin or any other crypto, you can reach out to crypto scam recovery experts here at this email:
The other thing we must say is don’t feel ashamed. You have been scammed. It was not your mistake and you are not alone in this.
Let your family or friends know if you’ve lost a substantial amount of money so that they can support you as you plan your next moves. Since you’re already in a dark place, the best course of action in that situation is to surround yourself with support.