Retired Artist Loses $2 Million in Crypto in Coinbase Scam

Ed Suman, a 67-year-old retired artist who was previously involved in the creation of Jeff Koons’ iconic Balloon Dog sculptures, has had a rough time this year, losing more than $2 million worth of cryptocurrency in an ingenious scam that appeared to gain his trust through a fake Coinbase employee.

Life savings in Bitcoin and Ethereum disappeared

After his retirement, Suman had built up a significant crypto portfolio: 17,5 Bitcoin and 225 Ethereum, together accounting for a large portion of his retirement savings. He had these crypto safely stored in a hardware wallet—a device designed to keep hackers out. But in March, things went wrong. Suman received a text message claiming to be from Coinbase, alerting him to suspicious activity on his account. Shortly after, he received a call from someone posing as a Coinbase employee using the name “Brett Miller.” The scammer managed to convince Suman to enter his seed phrase—the secret access code to his wallet—into a fake Coinbase website.

Nine days later he received another call and within a short time all his crypto holdings were gone, even with the security of a hardware wallet. It was a shocking experience that cost him his life savings.

Coinbase data breach enabled scam

The scam comes shortly after a major data breach at Coinbase, in which corrupt customer service representatives in India were bribed to gain access to sensitive user information. The breach affected an estimated 1% of transactions in a month and included names, balances, and transaction details.

Roelof Botha, a prominent investor at venture capitalist Sequoia Capital, also fell victim to this data breach. However, in his case, there is no evidence that money was actually stolen from his accounts.

Coinbase steps in after reputational damage

In light of the reputational damage, Coinbase acted quickly. The Indian employees involved have been fired and the company has announced that it will invest between $180 million and $400 million in remediation and compensation for victims. The case highlights the growing risk of social engineering in the crypto space. Even experienced users with well-secured wallets can be vulnerable when criminals gain their trust through data leaks and credible fake communications.

Frequently Asked Questions

What exactly happened to Ed Suman?
Ed Suman lost over $2 million in cryptocurrency after a scammer posed as a Coinbase employee and tricked him into entering his seed phrase into a fake website.

How did the scammer get Suman's information?
The scammer took advantage of a data breach at Coinbase, where sensitive user information became accessible to criminals.

What steps has Coinbase taken following these incidents?
Coinbase has laid off the employees involved and announced it will invest between $180 million and $400 million in remediation and compensation for affected individuals.