The U.S. Department of Justice revealed on Thursday that a sophisticated cryptocurrency fraud scheme targeting Coinbase users has resulted in more than $20 million stolen from hundreds of victims worldwide. Chirag Tomar, an Indian citizen, has been sentenced to five years in prison for his role in orchestrating the scam.
How the Scam Worked
Tomar and his co-conspirators created spoofed websites that mimicked Coinbase Pro, the exchange's professional trading platform. Using similar domain names, they tricked users into entering their login credentials and two-factor authentication (2FA) codes. In some cases, victims were convinced to install remote desktop software, giving scammers direct control of their computers and full access to their real Coinbase accounts. The fraudsters also posed as Coinbase customer support agents, either calling victims or directing them to fake hotlines to extract 2FA codes.
Funds Flow and Luxury Lifestyle
Once inside the accounts, the criminals quickly moved stolen cryptocurrency through multiple wallets before converting it to cash. The proceeds funded Tomar's lavish lifestyle, including high-end vehicles, luxury watches, and international travel. A notable incident occurred in February 2022 when a North Carolina resident lost over $240,000 after logging into a fake Coinbase site and sharing authentication codes with a fraudulent representative.
Investigation and Sentencing
Tomar was apprehended at Atlanta airport in December 2023 and pleaded guilty to conspiracy to commit wire fraud in May 2024. The U.S. Secret Service and FBI played pivotal roles in the investigation, ultimately dismantling the operation. Tomar will remain in custody before being transferred to a federal prison, and will likely be deported to India after serving his sentence. This case underscores the importance of verifying website URLs and avoiding unsolicited support calls. Coinbase users are advised to enable hardware security keys or anti-phishing codes for enhanced protection.