Blockchain investigator ZachXBT exposed a New York-based scammer, Christian Nieves, known online as “Daytwo” and “PawsOnHips,” who stole over $4 million from Coinbase users through a sophisticated social engineering scheme. Nieves and his small call center team allegedly posed as Coinbase support, cold-calling users with warnings of “suspicious activity” to trick them into creating wallets with compromised seed phrases via phishing websites.
The stolen funds were funneled into crypto casinos like Roobet, converted to privacy coins like Monero, or spent on luxury items such as a custom Corvette and a Rolex. One notable case involved an elderly victim losing $240,000 in November 2024. Nieves openly bragged about his activities on social media and Discord, even taunting ZachXBT with a photo flipping him off. On-chain data linked his Roobet deposit address to over 30 suspected thefts, and his gambling losses led him to steal from accomplices.
ZachXBT noted Nieves’ blatant disregard for anonymity makes this an easy case for law enforcement, though victim recovery is unlikely due to the funds being gambled away. This case highlights the growing threat of social engineering in crypto, exploiting human trust rather than technical vulnerabilities.
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The ZachXBT exposure of Christian Nieves’ $4 million social engineering scam has significant implications for the cryptocurrency ecosystem and highlights a deepening divide in trust and security within the space. Scams exploiting trusted platforms like Coinbase undermine user confidence, particularly among less tech-savvy individuals like the elderly victim who lost $240,000. This could slow mainstream adoption as potential users fear falling prey to sophisticated schemes.
Social engineering, unlike technical hacks, targets human psychology, making it harder to mitigate with software solutions. Nieves’ success in posing as Coinbase support shows how easily trust can be manipulated, emphasizing the need for better user education. High-profile scams fuel calls for stricter crypto regulations. Lawmakers may push for enhanced KYC/AML measures or oversight of crypto exchanges and gambling platforms like Roobet, which Nieves used to launder funds.
However, this could stifle innovation or drive activity to unregulated jurisdictions. With funds funneled into privacy coins like Monero or gambled away, recovery is nearly impossible. This highlights the irreversible nature of crypto transactions, leaving victims with little recourse and pressuring exchanges to improve fraud prevention.
Nieves’ brazen behavior, including taunting ZachXBT, suggests scammers feel untouchable due to slow law enforcement responses or jurisdictional challenges. This could inspire copycat schemes unless authorities act decisively.
The scam underscores a growing gap between experienced crypto users, who might recognize red flags, and newcomers or non-technical users, who are prime targets. This divide exacerbates inequality in the crypto space, as novices face disproportionate risks. Coinbase, a centralized exchange, was targeted due to its large user base and perceived authority.
This contrasts with decentralized platforms, which are less susceptible to social engineering but harder to navigate for beginners, deepening the divide between user preferences for convenience versus security. The scam’s use of crypto casinos and privacy coins highlights a rift between regulated entities (like Coinbase) and unregulated platforms (like Roobet or Monero). This divide complicates efforts to track illicit funds and fuels debates over privacy versus accountability in crypto.
ZachXBT’s role as a blockchain sleuth reflects a divide between community-driven accountability and formal law enforcement. While his work exposes scams, it also shows institutional gaps in addressing crypto crime, leaving users reliant on independent investigators. The Nieves case illustrates how social engineering exploits both technical and social divides, urging stronger education, platform safeguards.