Blockchain Detective ZachXBT Exposes Coinbase as Users Lose $65,000,000 to Scams

Hodl Topic, February 4th, 2025

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📈 Preview On Today’s News:

1. - Blockchain Detective ZachXBT Exposes Coinbase as Users Lose $65,000,000 to Scams

2. - Senator Lummis Pushes for a Strategic Bitcoin Reserve to Cut U.S. Debt 

3. - Bitcoin Kimchi Premium Hits 10-Month High Amid Market Dip

Keep reading below for more!

Today’s News:

1)

Blockchain Detective ZachXBT Exposes Coinbase as Users Lose $65,000,000 to Scams

Crypto investigator ZachXBT has accused Coinbase of failing to protect its users after identifying $65 million in losses due to social engineering scams between December 2024 and January 2025. Working with another researcher, ZachXBT analyzed on-chain data and DMs from victims, estimating that total losses could reach $300 million annually. Scammers impersonate Coinbase support using spoofed phone numbers and emails, tricking victims into transferring funds to fraudulent wallets. Despite previous warnings, Coinbase has yet to implement stronger security measures or take action against known scammers, prompting calls for improved user protection and legal accountability.

• ZachXBT’s investigation revealed $65 million in Coinbase user losses over two months due to social engineering scams, with real figures potentially much higher.

• He criticized Coinbase for weak security, poor customer support, and inaction against scammers, urging the exchange to enhance protections and pursue legal action.

2)

Senator Lummis Pushes for a Strategic Bitcoin Reserve to Cut U.S. Debt 

Senator Cynthia Lummis has proposed the creation of a Strategic Bitcoin Reserve as a solution to the U.S. national debt, which currently stands at $36 trillion. She argues that Bitcoin's historical annual growth of around 55%—even with a slower future rate—could significantly reduce the debt over the next two decades. Lummis believes this reserve could correct past financial mismanagement and alleviate the economic burden on younger generations. Support for the initiative is growing at the state level, with at least 11 states introducing bills and over 3,300 letters sent to Congress urging recognition of Bitcoin as a national reserve asset.

• Senator Cynthia Lummis proposes a Strategic Bitcoin Reserve, claiming Bitcoin's growth could help pay off a large portion of the $36 trillion U.S. debt over 20 years.

• The initiative is gaining traction, with 11 states introducing bills and thousands advocating for Bitcoin’s recognition as a national reserve asset.

3)

Bitcoin Kimchi Premium Hits 10-Month High Amid Market Dip

South Korea’s Bitcoin Kimchi Premium Index surged to 9.7%, its highest level in ten months, despite a broader market downturn that saw Bitcoin drop below $92,000 and Ethereum plunge 20%. The premium, which reflects the price gap between Bitcoin on Korean exchanges and global markets, spiked as Korean investors continued aggressive buying, while restrictions on foreign investors limited arbitrage opportunities. Analysts suggest that the premium could remain elevated if market instability persists, with historical averages hovering around 5%.

• South Korea’s Bitcoin Kimchi Premium surged to 9.7%, reaching a 10-month high as Bitcoin and Ethereum prices fell sharply.

• The premium remains high due to strong local demand and regulatory barriers limiting arbitrage, with analysts expecting fluctuations based on market stability.

4)

Elon Musk Pushes Blockchain to Combat U.S. Treasury Fraud 

Elon Musk has criticized the U.S. Treasury for allegedly approving fraudulent payments and proposed blockchain as a solution to enhance transparency. His remarks, made on X on February 2, accused career officials of unlawfully greenlighting transactions, even to fraudulent and terrorist groups. Crypto commentator Mario Nawfal amplified the discussion by suggesting Treasury transactions be moved on-chain, to which Musk responded with a firm “Yes!” Supporters argue that blockchain could create an immutable, real-time record of every dollar spent, reducing corruption and inefficiencies, while skeptics caution against political resistance and implementation challenges.

• Musk claims the U.S. Treasury approves fraudulent payments and endorses blockchain as a potential fix for transparency and fraud prevention.

• The proposal has sparked debate, with advocates highlighting blockchain’s potential to eliminate financial mismanagement and critics questioning feasibility due to political and structural hurdles.

5)

Coinbase Secures UK Approval for Crypto Services 

Coinbase has officially received regulatory approval to launch cryptocurrency services in the UK, gaining Virtual Asset Service Provider (VASP) registration from the Financial Conduct Authority (FCA). This approval allows Coinbase to offer both crypto and fiat services in the UK, its largest international market. The FCA has been strict with registrations, approving only 145 applicants, making this a significant milestone for the exchange. This expansion follows Coinbase’s recent regulatory approval in Argentina and the relaunch of Bitcoin loans in the U.S., reinforcing its global growth strategy.

• Coinbase has obtained VASP registration in the UK, enabling it to provide crypto and fiat services in a highly regulated market.

• The approval strengthens Coinbase’s international presence, following recent regulatory successes in Argentina and the U.S.

6)

Trump Reshapes US Financial Oversight With CFPB Shakeup 

US Treasury Secretary Scott Bessent, recently confirmed by the Senate, has been appointed as the acting director of the Consumer Financial Protection Bureau (CFPB) after President Donald Trump fired Rohit Chopra. Chopra, appointed by Biden in 2021, had emphasized investigations into Big Tech and Wall Street. Bessent, aligned with the Trump administration’s stance on crypto and banking regulations, opposes a US central bank digital currency and will oversee the CFPB until a Senate-confirmed replacement is appointed. Meanwhile, Trump's administration continues reshaping financial oversight, with SEC and CFTC leadership changes reinforcing its deregulatory agenda.

• Trump appointed Treasury Secretary Scott Bessent as acting CFPB head after firing Rohit Chopra, signaling a shift in financial regulation priorities.

• With key leadership changes at the SEC and CFTC, the administration is moving towards a deregulatory approach, including limiting agency oversight of banks and financial markets.

7)

Dr Disrespect’s Midnight Society Shuts Down Amid NFT Game Collapse 

Midnight Society, the gaming studio co-founded by YouTube streamer Dr Disrespect (Guy Beahm), has officially shut down, marking the end of its ambitious NFT-funded shooter, Deadrop. The studio, founded in 2021 alongside former Call of Duty and Halo developers, aimed to create a community-driven multiplayer experience, funding its development through NFT sales. However, Deadrop faced significant challenges in 2024 following Beahm’s departure amid misconduct allegations and a declining NFT market, ultimately leading to the studio’s closure. Midnight Society announced its shutdown on January 30, thanking its supporters and pledging to help its developers find new opportunities.

• Midnight Society, the studio behind Deadrop, shut down after struggling with funding issues and the fallout from Dr Disrespect’s misconduct allegations.

• The NFT-driven game will never be released, with the studio acknowledging its failure but committing to assisting affected developers in finding new roles.

8)

Crypto.com Expands Global Reach with New Licenses and Stock Trading 

Crypto.com has secured a MiCA license to operate across the EU, reinforcing its commitment to regulatory compliance and expanding its services. The exchange also withdrew its lawsuit against the SEC, signaling its intent to collaborate with U.S. regulators. In addition to crypto trading, Crypto.com now offers stock and ETF trading in the U.S. after acquiring multiple brokerage firms. The company is doubling down on sports sponsorships, extending its Formula 1 deal until 2030 and partnering with the UEFA Champions League. Asia remains a strategic focus, with Singapore serving as its global innovation hub for blockchain and Web3 advancements.

• Crypto.com obtained a MiCA license for EU operations, withdrew its SEC lawsuit, and launched stock and ETF trading in the U.S. after acquiring brokerage firms.

• The company strengthened its presence in sports sponsorships and continues investing in Asia as a key crypto market, with Singapore as its innovation hub.

9)

Russia Imposes Strict Regulations on Crypto Mining and Tax Reporting 

Russia is set to enforce mandatory registration of crypto mining equipment and a new tax reporting framework to regulate the industry. The Ministry of Energy plans to establish a central registry, making it illegal to mine without registered equipment, particularly in banned regions where mining has been restricted since December 2024. Additionally, a new digital tax reporting platform by the Federal Taxation Service (FNS) now requires miners to report their earnings monthly, with tax rates set at 13% for incomes up to $23,976 and 15% beyond that. The move aims to boost state revenue but may face challenges similar to Kyrgyzstan’s struggles with fluctuating crypto tax collection.

• Russia mandates crypto mining equipment registration and launches a digital tax reporting platform, enforcing strict regulations on the industry.

• Miners must pay taxes of 13-15% based on earnings and file monthly reports, a move expected to increase state revenue but with uncertain long-term stability.

10)

Coinbase Secures UK Regulatory Approval, Strengthening Global Presence 

Coinbase has obtained a Virtual Asset Service Provider (VASP) license from the UK Financial Conduct Authority, reinforcing its leadership among digital asset platforms in the region. This regulatory approval is a key part of Coinbase’s international expansion strategy, allowing it to align with local regulations while enhancing service offerings for institutional and individual clients. The move highlights the UK’s role as a crucial market for the company and underscores its commitment to operating within a legal framework that balances financial innovation with consumer protection. Coinbase also plans to pursue similar approvals in other countries to solidify its global position in the crypto industry.

• Coinbase secured a VASP license from the UK’s financial regulator, strengthening its position and enabling expansion under a compliant framework.

• The approval supports Coinbase’s broader global growth strategy, aiming to enhance investor confidence, institutional participation, and financial innovation.