- More than 50% of transaction volume on some crypto protocols involves stolen funds.
- So far in 2025, crypto hacks have stolen $2.1 billion.
- The Tron blockchain’s shadow market “Black U” is estimated to be worth up to $10 billion.
The crypto industry is facing a new wave of criminal activity driven by politically backed meme coins and widening legal loopholes that continue to shield bad actors.
ZachXBT, a blockchain investigator known for tracking on‑chain fraud, recently warned in a post on X that crypto crime has entered a “super loop,” with scams and thefts becoming more sophisticated and widespread.
His remarks come amid a broader industry reckoning as high‑value hacks, phishing campaigns and abuse of decentralized protocols threaten confidence in the space.
Outdated court rulings and unchecked influencers make the problem worse
According to ZachXBT, a major factor behind the surge in crime is an outdated legal framework that repeatedly favors smart contract developers in court.
In many cases, those who exploit decentralized systems walk away unpunished because judges interpret code‑based vulnerabilities as permissible use rather than theft.
He also highlighted the role of influencers and key opinion leaders who promote fraudulent crypto projects without facing consequences.
In jurisdictions where undisclosed paid promotions are illegal, enforcement remains weak or non‑existent.
ZachXBT estimates that regulators could have fined these individuals and projects between $50 million and $100 million over the years if they had pursued accountability more aggressively.
In one post he commented, “If you ever wanted a chance to extract value from this industry, now is the best time,” referring to the lawless feeling dominating parts of the ecosystem.
He added that in some protocols more than half of transaction volume involves stolen funds, yet the teams continue to collect fees with little scrutiny.
Criminals exploit blockchain transparency and weak oversight
While blockchain technology enables full transaction transparency that can help trace illicit funds, ZachXBT says it also aids criminals by exposing network activity and vulnerabilities they can study and exploit.
He alleges groups linked to North Korea, such as Lazarus, have leveraged this insight.
ZachXBT reports that laundering syndicates and over‑the‑counter brokers have successfully moved stolen assets from platforms including Bybit, DMM Bitcoin and WazirX.
Because of the volume and complexity of these transactions, the activity can go undetected for long periods.
He also claims a shadow market called “Black U” has emerged on the Tron blockchain, with an estimated value between $5 billion and $10 billion.
Much of that marketplace’s activity is suspected to involve money laundering; despite on‑chain records, tracing the full flow of funds is difficult.
Industry losses are set to keep rising through 2025
ZachXBT’s warning aligns with mounting evidence of damage. According to blockchain security firm CertiK, crypto attacks have already caused losses exceeding $2.1 billion in 2025 to date.
In May alone, cybersecurity firm PeckShield reported 20 major crypto hacks that resulted in $244.1 million in stolen assets.
Although that figure represented a 39.29% decrease compared with April, the continued scale of theft is still alarming.
Recent increases in data breaches have further exposed user vulnerabilities, underscoring the need for stronger protections.
In concluding his remarks, ZachXBT questioned whether systemic change will only occur after catastrophic losses force regulators to act.
For now, speculative mania, regulatory gaps and unchecked promotion combine to create a fertile environment for crypto‑related crime.