Renowned on-chain investigator ZachXBT has uncovered a massive phone-based support act that siphoned over $4M Coinbase scam from users. The scheme, orchestrated by New York-based con artist Christian Nieves, highlights the dangers of social engineering in the crypto space. Operating under aliases like Daytwo and PawsOnHips, Nieves allegedly impersonated Coinbase customer support representatives to defraud victims, leaving their wallets empty and exposing vulnerabilities in user security practices.
The Anatomy of a Sophisticated Scam
In a detailed post on X, ZachXBT outlined how Nieves executed the scam with alarming precision. According to the investigation, Nieves ran a small call center operation where he and his team targeted victims through phone-based phishing tactics.
The scam involved tricking individuals into creating Coinbase wallets using compromised seed phrases on fraudulent websites. Once victims handed over their private keys, the scammers gained full access to their funds. ZachXBT even shared video evidence showing Nieves actively participating in these fraudulent activities, further solidifying the case against him.
One notable incident occurred in November 2024, when an elderly individual lost $240,000 to a member of Nieves’ operation, identified by the alias “Paranoia” (real name: Justin). This case underscores the devastating impact of such scams on vulnerable populations.
Following the Money Trail
Through meticulous blockchain analysis, ZachXBT traced the stolen funds to uncover how the scammers laundered their ill-gotten gains. The stolen cryptocurrency was reportedly divided into three portions:
- Roobet Deposits: A significant share of the funds was sent to Roobet, a crypto-only gambling platform known for its anonymity.
- Monero Conversions: The remaining amounts were converted into Monero (XMR), a privacy-focused cryptocurrency that makes transactions nearly untraceable.
- Personal Spending: Some funds were used for personal expenses, including the purchase of a Corvette branded with Nieves’ online alias, PawsOnHips.
In one recorded Discord call, Nieves inadvertently exposed his Roobet deposit address via an open browser tab, linking him directly to the flow of stolen funds. Blockchain analysis revealed that the same deposit address was connected to over 30 suspected crypto thefts , totaling more than $4 million.
Nieves’ Reckless Behavior
What’s particularly striking about this case is how little effort Nieves made to conceal his identity. In recorded calls, Nieves and his associates openly discussed laundering stolen funds while displaying their faces. Such reckless behavior not only implicates him further but also highlights the brazen nature of the operation.
Additionally, Nieves’ compulsive gambling habits played a role in exposing his activities. According to ZachXBT, Nieves frequently placed bets on crypto casino platforms during live Discord calls with acquaintances. These actions left a digital trail that investigators were able to follow, ultimately tying Nieves to the fraudulent activities.
Broader Implications for Crypto Security
This investigation sheds light on the growing threat of social engineering scams in the digital asset space. As phishing schemes become increasingly sophisticated, users must remain vigilant and adopt stronger security measures, such as:
- Never sharing seed phrases or private keys, even with seemingly legitimate support representatives.
- Using two-factor authentication (2FA) to add an extra layer of protection to accounts.
- Verifying the authenticity of websites and communication channels before providing sensitive information.
Platforms like Coinbase also have a responsibility to enhance user protections and educate customers about common scams. Public awareness campaigns and improved verification processes could help mitigate the risk of similar incidents in the future.
The Role of Independent Investigators
The case underscores the critical role of independent blockchain analysts like ZachXBT in combating fraud. By leveraging on-chain data and forensic tools, these investigators can expose bad actors and hold them accountable, even when traditional law enforcement struggles to keep pace with the rapidly evolving crypto landscape.
As ZachXBT noted, the scope of Nieves’ activities may extend beyond the $4 million currently linked to his operation. “I expect there’s many additional victims I am unable to directly link,” he wrote, emphasizing the need for continued vigilance in identifying and addressing crypto-related crimes.
Final Thoughts
The $4M Coinbase scam uncovered by ZachXBT serves as a stark reminder of the risks associated with digital assets. While blockchain technology offers unparalleled transparency, it also presents opportunities for malicious actors to exploit unsuspecting users.
For victims of such scams, the financial and emotional toll can be devastating. However, cases like this also highlight the importance of community-driven efforts to combat fraud and protect users.
As the crypto ecosystem continues to grow, stakeholders must work together to strengthen security measures, raise awareness, and ensure that platforms like Coinbase remain safe spaces for investors.
