Ornella Hernandez

The Coinbase Wallet now has an updated order preview screen that lets users simulate the outcome of a transaction on a decentralized application (dapp) before hitting confirm.



The wallet is a general purpose dapp not limited to interacting with the Coinbase exchange. The new “Transaction Preview” feature gives users an estimate of how their token balance will change once they buy a token or an NFT, based on a simulation of the transaction on the blockchain.



The company tweeted that the goal of this feature is to provide users with a “better understanding of how a dapp or smart contract will interact with your wallet” and “greater peace of mind.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1/ By automatically simulating the code that would execute when you authorize a transaction on an EMV-compatible network, we provide you with an estimate of which assets will leave your wallet and any assets you’ll get back in return.&mdash; Coinbase Wallet (@CoinbaseWallet) <a href="https://twitter.com/CoinbaseWallet/status/1593375216293511168?ref_src=twsrc%5Etfw">November 17, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This feature may come in handy for retail users wary of bad actors in the space, given the amount of scams and frauds that have plagued the crypto world this year.&nbsp;



The recent <a href="https://blockworks.co/news/worse-than-enron-sbfs-ftx-has-a-complete-absence-of-trustworthy-information" target="_blank" rel="noreferrer noopener">FTX saga</a> is one in a string of events that shed a light on the risks of centralized finance, but those who self-custody can fall victim to fake investment opportunities and romance-linked fraud, if they’re not careful. 



Over <a href="https://blockworks.co/news/frauds-and-scams-top-1b-since-2021-ftc-says" target="_blank" rel="noreferrer noopener">$1 billion was traced in losses in crypto-related scams</a> between the start of 2021 and the first half of 2022. Most victims were targeted on Instagram, Facebook, WhatsApp and Telegram and then tricked into making transfers on crypto exchanges like Coinbase.



Ethereum wallet Argent also has a preview trade screen with a transaction summary, but Coinbase Wallet adds additional information for users, such as an alert if a URL is associated with a phishing attempt.&nbsp;&nbsp;



Auston Bunsen, co-founder of infrastructure provider QuickNode said the preview feature will make it &#8220;significantly harder&#8221; for hackers and scammers to steal funds from Coinbase Wallet users. He added that it &#8220;gives more visibility and power to users to protect their funds — making self-custody even more attractive in the wake of FTX.&#8221;



For institutional customers, Coinbase has another screening tool that helps mitigate the risk of transacting at scale. Called the Know Your Transaction (KYT) API, it enables clients to determine if an entity or transaction is facilitating illegal or fraudulent activity. It also generates risk scores for user addresses, using the <a href="https://blockworks.co/news/google-signals-major-crypto-push-with-ethereum-solana-support" target="_blank" rel="noreferrer noopener">Google Cloud</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Coinbase Wallet Feature Takes Aim at User Safety

Shalini Nagarajan

<div id="highlights-block_630f1be7fc0d8" class="highlights">
 <ul>
 <li>Five major cryptocurrency exchanges have been requested to submit documents to the US lawmakers</li>
 <li>Federal agencies were asked whether crypto holdings should be treated as commodities, securities, or both</li>
 </ul>
 
</div>



Nearly half a million people have lost more than $1 billion to crypto crime and fraud since the beginning of last year — a <a href="https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reports-show-scammers-cashing-crypto-craze" target="_blank" rel="noreferrer noopener">figure</a> that’s now prompted a US House of Representatives committee to investigate how major exchanges such as Coinbase, FTX and Kraken operate.



Rep. Raja Krishnamoorthi, who chairs an oversight committee on economic and consumer policy, <a href="https://oversight.house.gov/news/press-releases/chairman-krishnamoorthi-requests-information-from-federal-agencies-and-crypto" target="_blank" rel="noreferrer noopener">sent letters</a> to four federal agencies and five crypto exchanges on Tuesday, requesting information on the mechanisms they have in place to tackle fraud and scams.



His nine letters were sent to the <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Yellen-Treasury%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">US Treasury</a>, <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Gensler-SEC%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">Securities and Exchange Commission</a> (SEC), <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Behnam-CFTC%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">Commodity Futures Trading Commission</a>, <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Khan-FTC%20re%20Crypto%20Fraud%20final.pdf" target="_blank" rel="noreferrer noopener">Federal Trade Commission</a>, <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Shroder-Binance%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">Binance.US</a>, <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Armstrong-Coinbase%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">Coinbase</a>, <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Bankman-Fried-FTX%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">FTX</a>, <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Powell-Kraken%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">Kraken</a> and <a href="https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2022-08-30.RK%20to%20Lyu-KuCoin%20re%20Crypto%20Fraud.pdf" target="_blank" rel="noreferrer noopener">KuCoin</a>.



“The lack of a central authority to flag suspicious transactions in many situations, the irreversibility of transactions, and the limited understanding many consumers and investors have of the underlying technology make cryptocurrency a preferred transaction method for scammers,” Krishnamoorthi wrote.



“For all these reasons, I am concerned about the growth of fraud and consumer abuse linked to cryptocurrencies.” The five crypto exchanges weren’t asked the same questions.



The Congressman highlighted the Department of Justice’s <a href="https://www.justice.gov/opa/pr/justice-department-announces-enforcement-action-charging-six-individuals-cryptocurrency-fraud" target="_blank" rel="noreferrer noopener">recent indictments</a> to point to fraudulent coin offerings and sham investment platforms as examples of fraud. 



Software developers have also taken advantage of heightened interest to create tokens, list them on exchanges and pump them before fleeing with investor funds, Krishnamoorthi noted. 



Blockchain analytics platform Chainlysis estimates these so-called rug pulls made up about <a href="https://go.chainalysis.com/rs/503-FAP-074/images/Crypto-Crime-Report-2022.pdf" target="_blank" rel="noreferrer noopener">37% of scam revenue</a> in 2021 — a massive jump from just 1% in 2020.



Krishnamoorthi asked the agencies and companies to provide specific information that would assist Congress in drafting legislation aimed at stabilizing the industry, with a September 12 deadline.



“Should cryptocurrency holdings be treated as commodities, securities, or both? Please explain,” one of the questions asked. The matter has stirred debate especially since the SEC recently <a href="https://cms.blockworks.co/sec-charges-former-coinbase-product-manager-with-insider-trading/">charged</a> a former Coinbase product manager with insider trading, alleging that he purchased at least nine crypto tokens that classify as securities.



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/pWUkU-GR9QB1aCoo3vNNx3rmpFVa2AdzxAGqEXuOuDXV2YuYfEcN7zCbr_UKPZiavzqyj_b7rklprnr6nk8N3F37k_L5q8U5O7pbpzzRnBFvADNrEa10gQ6VKFunk13CesoWMhAU5wO76RtcQjlIOtBNX0jqmmxpJv022Bpgo5_ic1yzXJAl_tEMcA" alt=""/><figcaption>Image source: <a href="https://go.chainalysis.com/rs/503-FAP-074/images/Crypto-Crime-Report-2022.pdf">Chainalysis</a></figcaption></figure>



Krishnamoorthi’s request for information from the crypto industry highlights increasing steps taken by authoritative agencies to rein in firms working in the space.&nbsp;



The Federal Bureau of Investigation on Monday also <a href="https://cms.blockworks.co/fbi-issues-warning-over-defi-exploits-open-source-development/">warned</a> of mounting instances where criminals are exploiting investor interest in cryptocurrencies. Data from Immunefi shows hacks against DeFi (Decentralized Finance) protocols resulted in <a href="https://cms.blockworks.co/defi-exploits-top-1-8b-ytd-though-security-getting-better-immunefi-says/">losses over $1.2 billion</a> in the first quarter, an almost eight-fold increase compared to the same time last year.



In July, Democrats <a href="https://cms.blockworks.co/seven-crypto-miners-show-disturbing-energy-use-lawmakers-say/">sought information</a> specifically from cryptocurrency miners. After arriving at “disturbing” findings into the environmental impact of crypto mining, Sen. Elizabeth Warren and US Rep. Rashida Tlaib were among six lawmakers who requested miners disclose their emissions and energy use.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

crypto scams