The cryptocurrency industry is facing a significant surge in criminal activities, exacerbated by an influx of politically backed meme coins and legal loopholes that provide cover for malicious actors. In a striking warning, blockchain investigator ZachXBT has noted that crimes related to cryptocurrencies have entered a “supercycle,” with fraudulent activities becoming increasingly sophisticated and widespread.
Outdated Laws and Unchecked Influencers Contribute to the Problem
ZachXBT attributes the rise in cryptocurrency crime to outdated judicial frameworks that continue to favor exploiters of smart contracts. In many instances, those who manipulate decentralized systems often evade punishment, with judges interpreting code-based exploits as legitimate rather than as theft.
He also emphasizes the complicity of key opinion leaders and influencers who promote fraudulent crypto projects without facing repercussions. In jurisdictions where disclosing paid promotions is mandatory, law enforcement remains either ineffective or entirely absent.
According to ZachXBT, regulators could have levied fines totaling between $50 and $100 million over the years by holding these individuals and projects accountable. He remarked that “if you ever wanted to exit the industry, now is the best time,” alluding to the prevailing sense of lawlessness within the ecosystem.
Alarmingly, more than half of the transaction volume in certain protocols is associated with stolen funds, yet the teams involved continue to collect fees without scrutiny.
Criminals Capitalize on Transparency and Weak Blockchain Oversight
While blockchain technology inherently provides full transaction transparency that allows for tracing illicit funds, ZachXBT notes it also enables crime by granting bad actors insight into network activities and vulnerabilities. Groups linked to North Korea, such as Lazarus, are reported to have exploited this environment.
ZachXBT suggests that laundering groups and over-the-counter brokers have successfully channeled stolen funds through platforms like Bybit, DMM Bitcoin, and WazirX. Such operations often go undetected for extended periods due to the volume and complexity of the transactions involved.
He further claims that a shadow market dubbed “Black U” has emerged on the Tron blockchain, with an estimated value between $5 and $10 billion. Much of this activity is believed to involve laundering operations that are difficult to track despite blockchain records.
Industry Losses Continue to Mount in 2025
ZachXBT’s warnings align with growing evidence of industry damage. As reported by blockchain security firm CertiK, over $2.1 billion has been lost to cryptocurrency-related attacks so far in 2025. In May alone, cybersecurity company PeckShield documented 20 significant cryptocurrency hacks, resulting in $244.1 million in stolen assets.
Despite a 39.29% decline from April, the scale of ongoing thefts remains alarming. Recent data breaches have further revealed user vulnerabilities, underscoring the urgent need for stronger protections.
ZachXBT concluded by pondering whether systemic change would only occur after massive losses compel regulators to take action. For now, the combination of speculative frenzy, regulatory gaps, and unchecked promotions continues to create a fertile ground for cryptocurrency-related crime.
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