- More than 50% of trading volume on some cryptocurrency protocols involves stolen funds.
- USD 2.1 billion stolen through crypto hacks so far in 2025.
- Tron blockchain “Black U” market valued at up to $10 billion.
The cryptocurrency industry is confronting a renewed wave of crime driven by the rise of politically backed meme coins and persistent legal gaps that continue to shield malicious actors.
Blockchain investigator ZachXBT, known for tracking on-chain fraud, warned in a recent post on X that crypto crime has entered a “supercycle,” with scams becoming both more sophisticated and more widespread.
His observation comes amid a broader reckoning in the sector as high-value hacks, phishing campaigns, and the misuse of decentralized protocols threaten to undermine confidence in the space.
Outdated court rulings and unchecked influencers worsen the problem
ZachXBT argues that one major factor behind the surge in crime is how courts often side with smart contract exploiters because legal frameworks have failed to keep pace with blockchain technology.
In many cases, people who manipulate decentralized systems go free because judges interpret code-based vulnerabilities as legitimate use rather than theft.
He also highlighted the role of influencers and key opinion leaders (KOLs) who promote fraudulent crypto projects without facing consequences.
Even in jurisdictions where failing to disclose paid promotions is illegal, enforcement remains weak or nonexistent.
ZachXBT estimated that regulators could have collected between $50 million and $100 million in fines over the years by holding these individuals and projects accountable.
In a tweet, he commented that “if you ever wanted a chance to extract from the industry, there hasn’t been a much better time,” referring to the sense of lawlessness currently dominating the ecosystem.
He added that more than half of all transaction volume on certain protocols involves stolen funds, yet teams continue to collect fees with little scrutiny.
Criminals exploit blockchain transparency and weak oversight
While blockchain technology enables full transaction transparency and helps trace illicit funds, ZachXBT said it also facilitates crime by revealing activity and vulnerabilities that bad actors can exploit.
Groups linked to North Korea, including Lazarus, are believed to have taken advantage of these conditions.
ZachXBT suggested that laundering networks and OTC brokers have successfully processed stolen funds from exchanges such as Bybit, DMM Bitcoin and WazirX.
These operations often remain undetected for long periods because of the volume and complexity of the transactions involved.
He also claimed that a shadow market, dubbed “Black U,” has emerged on the Tron blockchain, with an estimated value between $5 billion and $10 billion.
Much of this activity is suspected to involve laundering operations that are difficult to track despite on-chain records.
Losses continue to rise across the sector in 2025
ZachXBT’s warning coincides with growing evidence of widespread damage. According to blockchain security firm CertiK, more than $2.1 billion has been lost to crypto attacks so far in 2025.
In May alone, cybersecurity company PeckShield reported 20 major crypto hacks resulting in $244.1 million in stolen assets.
Although that figure is a 39.29% decrease from April, the ongoing scale of thefts remains alarming.
Recent data leaks have further exposed user vulnerabilities, highlighting the urgent need for stronger protections.
ZachXBT concluded by questioning whether systemic change will only occur after large-scale losses force regulators to act.
For now, a combination of speculative mania, regulatory loopholes and unchecked promotion continues to create a fertile environment for crypto-related crime.