It seemed like a perfectly believable story: Two teenagers in Canada posed as members of Coinbase’s support team and scammed an American man out of $4.2 million in Bitcoin and Ethereum.
After seeing an email with a news release about the supposed arrest of the teenagers, a reporter from the Canadian Broadcasting Corp. (CBC), one of Canada’s leading news outlets, ran the since-deleted story, according to a member of the Hamilton Police Service familiar with the matter. (However, whether that email was the ultimate source for the story has yet to be determined.) The police in Hamilton, a city near the border of New York, reportedly teamed up with the FBI and the U.S. Secret Service Electronic Crimes Task Force to pin down the two 17-year-olds, who went by the aliases “Felon” and “Gaze.”
News of the arrest of the teenagers, who, according to reports, used some of their $4.2 million in stolen crypto to buy coveted username @zombie on Instagram, then spread across a number of crypto publications. However, the entire story—from the teenagers’ alleged heist to their arrest—is a sham, according to the Hamilton Police Service.
“[We] can confirm this investigation did not occur and the email did not originate from the Hamilton Police Service,” the police said in an official statement. The FBI did not immediately respond to a request for comment. The CBC has since removed its original story, and its URL now redirects to a new piece describing how its reporter received a hoax email.
“Coinbase has extensive security resources dedicated to educating customers about preventing phishing attacks and scams,” a spokesperson for the exchange said in a statement. “We work with international law enforcement to ensure that anyone scamming Coinbase customers is prosecuted to the fullest extent of the law.”
While several publications were duped into running a lurid story of yet another crypto arrest, the theft as described would not have been the first of its kind.
In January 2018, in the village of Irvington, N.Y., 15-year-old Ellis Pinsky, nicknamed “Baby Al Capone,” allegedly stole almost $24 million from crypto millionaire Michael Terpin. Pinsky agreed to pay back Terpin without admitting any guilt.
And the Hamilton Police Service itself has investigated and arrested a teenager for stealing almost $35 million in crypto through a SIM swap attack, or when scammers port a victim’s phone number over to their devices to bypass two-factor authentication.
The investigation and arrest, which happened in 2021, echoes the spoofed news release, including the Hamilton police partnership with the FBI and U.S. Secret Service Electronic Crimes Task Force as well as the stolen crypto being spent on a rare online username.
Update, July 5, 2023: This article has been updated with an official comment from the Hamilton police as well as more information about the CBC.
