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Blockchain investigator ZachXBT has sounded the alarm on a burgeoning “crime supercycle” in the crypto sector, fueled by meme coin launches and dismissed legal actions.
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Despite over half of crypto transactions involving stolen funds, many protocols continue to profit by collecting fees, highlighting systemic vulnerabilities.
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According to COINOTAG sources, lax regulations and outdated laws allow influencers and bad actors to operate with near impunity, exacerbating criminal activity.
ZachXBT warns of a growing crypto crime supercycle driven by meme coins, lax regulation, and stolen funds, urging increased vigilance in the blockchain ecosystem.
ZachXBT Highlights the Rising Crypto Crime Supercycle and Its Implications
ZachXBT’s recent analysis underscores a troubling escalation in crypto-related criminal activities, describing the phenomenon as a “crime supercycle.” This surge is attributed to the proliferation of meme coins launched by political figures and the dismissal of critical court cases, which collectively embolden illicit actors. The investigator emphasizes that while blockchain technology offers transparency, the current regulatory framework fails to deter misuse effectively.
He points out that many cryptocurrency protocols continue to generate revenue by collecting fees on transactions, even when more than 50% of these transactions involve stolen assets. This paradox highlights a systemic failure to address fraud at its core. Furthermore, key opinion leaders and influencers promoting fraudulent schemes often evade legal consequences, perpetuating a culture of impunity within the industry.
Regulatory Gaps and the Role of Influencers in Crypto Crime
ZachXBT criticizes outdated legal systems that struggle to keep pace with blockchain innovations, resulting in courts occasionally siding with exploiters of smart contracts. He notes that government agencies have missed significant opportunities to impose fines on influencers and projects that failed to disclose paid promotions, an illegal practice in many jurisdictions. Instead, regulatory efforts have disproportionately targeted open-source developers and reputable decentralized protocols, leaving the broader ecosystem vulnerable.
This regulatory inertia has allowed laundering groups and small over-the-counter brokers to thrive, facilitating the movement of illicit funds with alarming ease. ZachXBT highlights the Lazarus Group’s continued success in laundering proceeds from high-profile hacks via platforms like Bybit and WazirX, illustrating the challenges law enforcement faces in curbing sophisticated cybercrime operations.
Impact of Crypto Crime on Industry Integrity and Financial Security
The ongoing crime supercycle not only undermines trust in the crypto ecosystem but also poses significant financial risks. ZachXBT estimates the “Black U” market on the Tron blockchain to be valued between $5 billion and $10 billion, with much of its activity remaining opaque and difficult to trace. This shadow economy facilitates a range of illicit operations, from money laundering to unauthorized asset transfers.
Recent data from security firms further highlight the scale of the problem. PeckShield reported 20 major crypto hacks in May 2025 alone, resulting in losses of $244.1 million—a decrease from April but still substantial. Certik’s figures reveal that hackers have stolen over $2.1 billion in 2025 through various attack vectors, including wallet compromises and phishing scams. These statistics underscore the persistent threat landscape and the need for enhanced security measures.
COINOTAG’s recent coverage of two major hacks in early June, causing $15 million in losses, further illustrates the urgency of addressing these vulnerabilities. ZachXBT’s call for vigilance resonates strongly amid these ongoing challenges, emphasizing that the industry must prioritize ethical practices and robust regulatory frameworks to mitigate future risks.
Conclusion
ZachXBT’s insights reveal a crypto ecosystem at a critical juncture, where unchecked criminal activities threaten to erode investor confidence and industry integrity. The convergence of meme coin hype, regulatory shortcomings, and influential actors operating without accountability has created a fertile ground for a sustained crime supercycle. Moving forward, stakeholders must advocate for stronger enforcement, updated legal frameworks, and greater transparency to safeguard the future of blockchain innovation. Heightened vigilance and proactive regulation will be essential to disrupt this cycle and restore trust in the crypto market.
