Non-Law Crypto Wallet Coinbase Wallets are trying to launch new features that could become new tools for fraudsters to target users.
Coinbase Wallet, a cryptocurrency wallet developed by Coinbase Exchange, appears to be aiming for super app status with new features, but some security experts have warned that it could do more harm than good.
Secure and encrypted messaging is coming to the new Coinbase wallet with @xmtp_. DMS and group chat are likely to be much more powerful.
– Talk to an AI agent
– Trading in real time
– Use the mini app directly on chat pic.twitter.com/qjzcgp52a– Coinbase Wallet (@coinbaseWallet) May 13, 2025
In an announcement of X on Tuesday, the Coinbase Wallet team said users will soon be able to use “encrypted messaging” powered by XMTP, an open protocol for instant communications.
Updates apply to both direct messages and group chats. The team also said users could access the mini app “directly via chat” and informed that they had introduced the Mini app but would push it into the same area as Telegram, which later restricted development to buildings on the Ton network.
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steals over $50 million children per weekend through the acquisition of Coinbase CEX accounts.
Coinbase has failed to understand, detect, or stop these for more than a year.
Instead, Coinbase has decided to build the ability to provide all wallet users with encrypted lines directly to scammers.
can’t believe it. https://t.co/7txrrd4nza
– Tay💖 (@tayvano_) May 14, 2025
Some users were excited about the update, but security experts weren’t very excited. MetaMask security officer Taylor Monahan called Coinbase in a post on X, saying that a scammer who has been taking over the user account at Coinbase “failed to understand, detect, or stop it.”
“Instead, Coinbase has decided to build a feature that will provide all wallet users with encrypted lines directly to scammers,” added Monahan.
“The future of money, or more open, free, efficient”
>You have now locked me out of my account twice in the past month. There’s no reason (again)
>You leaked your customer data You haven’t yet transparently disclosed (this leads to theft)
Coinbase is not recommended as…
– Zachxbt (@zachxbt) April 6, 2025
Monaghan’s remarks reflect years of criticism from anonymous blockchain investigator Zachxbt, who repeatedly flagged Coinbase’s weak protection against social engineering fraud. In a recent Telegram post, Zachxbt said “there are no similar issues with other major exchanges,” adding to another X post that “I can’t recommend Coinbase as an exchange to anyone.”
At the time of reporting, Coinbase has not issued a public response to the accusation.
read more: Coinbase CEO says “no” Saylor strategy: Why Brian Armstrong handed out Bitcoin balance sheet
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