Consumer Protection Tuesday: How Blockchain Helped Uncover a Pattern of Phone Theft, Coercion, and Crypto Drains in London
Tl;dr: Some thieves have tried to leverage stolen phones to access victims’ financial apps, but crypto’s public ledger makes those funds anything but invisible. Coinbase traced a cluster of late-night phone-theft incidents, blocked the suspect wallets, and provided evidence that led to UK arrests—proof that blockchain data strengthens consumer protection.
As mobile phones have evolved into financial hubs, they’ve also become high-value targets for criminals. And when those phones contain access to banking apps, payment platforms, and crypto wallets, the stakes are even higher.
In 2021, we received a referral from the City of London Police that marked the beginning of a troubling trend: thieves targeting victims late at night, stealing their phones, and then coercing access to their financial apps—including their Coinbase accounts.
The Setup: A New Type of Street Crime
One victim’s case stood out. They had been robbed, and shortly afterward, their Coinbase account was accessed and drained. Our investigation revealed the suspect had:
Used the victim’s own device to log in
Completed an identity verification (IDV) refresh in the early hours of the morning
Uploaded images where the victim was clearly present—coerced in the back of a car, holding their own ID, with others beside them
This wasn’t opportunistic theft. It was calculated, coordinated, and designed to bypass every layer of digital security. And it worked because the attackers had the victim physically present to unlock apps, pass biometric checks, and approve transfers.
What We Did
From that single incident, our team was able to:
Identify a cluster of similar cases, each involving late-night phone theft, coercion, and rapid unauthorized crypto sends
Build a victim population of over >30 individuals by reviewing Coinbase data
Map crypto addresses identifying a network of wallets used, creating a network of accounts used repeatedly across incidents
We then proactively:
Blocked transactions to the identified addresses
Flagged suspect wallets in our internal systems
Referred the case to UK law enforcement
Our blockchain analysis, combined with account-level data, helped turn individual reports into a larger, actionable pattern.
Why This Matters
This wasn’t a high-profile hack or headline-grabbing scam. It was traditional street crime—robbery and coercion—updated for the smartphone era. But here’s what’s different: with crypto, the money trail doesn’t disappear.
Blockchain forensics allowed us to trace the flow of funds, connect separate cases, and help law enforcement go beyond one-off theft to uncover a linked series of coordinated crimes.
And in the end, that work mattered. UK law enforcement used our findings to help support the arrest and charges of several bad actors with the potential for significant sentencing. Coinbase’s analysis was included as part of the prosecution’s case.
How Customers Can Help Protect Themselves
While our teams work hard behind the scenes to keep users safe, there are important steps you can take to protect your financial life:
Use a strong passcode: Set a long, unique passcode on your device and apps—biometrics alone are not enough.
Stay aware in public: Be mindful when entering your phone PIN or opening financial apps in crowded places.
Limit app access: Use security settings to require reauthentication for sensitive apps like banking and crypto platforms.
Enable additional Coinbase security features: Two-factor authentication (2FA) with an authenticator app—not SMS—is highly recommended.
Keeping your phone—and your accounts—locked down makes it harder for criminals to exploit quick-access scenarios.
Telling your network provider straight away if your phone is stolen because they can blacklist and deactivate it remotely.
If you’ve lost money or provided your financial information to someone, notify your bank immediately.
The Bigger Picture
This is exactly why we partner so closely with law enforcement. Not just to respond—but to prevent. By working together, we can disrupt patterns, protect users in real time, and build safer systems.
As crypto becomes part of everyday financial life, it’s also becoming part of everyday crime investigations. That doesn’t make crypto a risk. It makes it a resource—one we’re proud to offer.
More cases are coming next week.
About Paul Grewal
Paul Grewal is the Chief Legal Officer of Coinbase. Before joining Coinbase, Paul was Vice President and Deputy General Counsel at Meta. Prior to Meta, Paul served as United States Magistrate Judge for the Northern District of California. Paul was previously a partner at Howrey LLP, where his practice focused on intellectual property litigation. Paul served as a law clerk to Federal Circuit Judge Arthur J. Gajarsa and United States District Judge Sam H. Bell. He received his JD from the University of Chicago Law School and his BS in Civil and Environmental Engineering from the Massachusetts Institute of Technology.
