This illustration photo shows the Coinbase logo in the background as a person checks cryptocurrencies prizes on a smartphone in Los Angeles on April 13, 2021.
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Several dozen Coinbase customers have brought a new arbitration demand against the famed cryptocurrency exchange, alleging that the company didn’t adequately protect them from scammers.
These victims, who say that they collectively lost over $21 million, were defrauded through what are known as “liquidity mining pool scams,” where people are tricked into putting cryptocurrency into what they believe to be true collective investment opportunities. However, victims eventually find out that they were duped into allowing victims to drain their accounts, forever, through the malicious use of so-called “smart contracts,” which self-executes code and automates transactions between crypto users.
Like other types of “pig butchering” scams, victims are repeatedly encouraged to make additional investments before their money is stolen.
Eric Rosen, the Boston-based attorney and former federal prosecutor who brought the case, said he believed this is the first case of its kind.
“It has [nearly] 100 victims, all people who have lost a significant amount of money and have been damaged by what happened, that’s what makes this pretty unique,” he told Forbes.
Alleged individual losses range from roughly $35,000 worth of the cryptocurrency known as USDT, or Tether, to over $662,000. If an…
