there's not much else we can do from here. you can try asking the mods on the coinbase subreddit: https://www.reddit.com/r/CoinBase
or you could try asking at https://ethereum.stackexchange.com/ as well. maybe there's something we're not thinking of.
the way i see it, there's a few possibilities:
1a. the merchant's seed is wrong
1b. you sent tokens to an address not in the merchant's wallet
2a. the reddit info is incorrect = the derivation path is wrong
2b. you are inputting the derivation path incorrectly
3. you haven't derived enough addresses or scanned for the address correctly
so this is all my merchant did
1) they use https://iancoleman.io/bip39/
Already used path : m/44'/60'/0'/0/0
m/44'/60'/0'/0
they checked first 150000 addresses was show up (in both path)
2) now they did :
They send some small amount of USDC to that address (address which I Sent USDT)
now in master Coinbase wallet that small amount USDC is showing and it's can withdrawal from Coinbase (this means Coinbase can access that address private key with merchant mnemonic phrase)
Coinbase write some kind of smart contract that when anyone send USDC or ETH amount in that address automatically send to Coinbase account and after merchant can withdraw (only USDT can't because , they don't support USDT so )
question 1 : we sure that Coinbase have that private key of address and they can withdraw USDC but not USDT, (so private key must be in merchant mnemonic phrase) which path? because we try both path suggesting by Coinbase (m/44'/60'/0'/0/0, m/44'/60'/0'/0)
question 2 : what is possibility of address in each path of mnemonic phrase ? (because it's seems like millions of addresses there)
question 3 : if any another wallet or Ledger use same path for ETH address also USDT, will it possible that 12 words mnemonic phrase put in ledger can be recover funds?
question 4 : is this legit? it can be solve issue if we setup off-line ? https://github.com/Mrtenz/FindETH
question 5 : merchant mnemonic phrase is definitely correct, there is any another way we can open only that address with mnemonic phrase?
Please anyone help me will be so much appreciated and rewardable