Political figures, including Donald Trump, promoting memecoins, along with relaxed regulations, have sparked what experts call a crypto ‘crime supercycle’. Investigators in the blockchain sector attribute this to increased negligence following the dismissal of a number of court cases by US authorities.
ZachXBT, a blockchain investigator, highlighted that the crypto environment’s susceptibility to exploitation has worsened after politicians started backing memecoins and regulatory bodies dropped certain legal challenges. This, according to him, has amplified negative behavior in the industry.
According to ZachXBT, prominent influencers and thought leaders in the cryptocurrency space continue to engage in scams without facing significant consequences. They’re alleged to evade repercussions even as they defraud their audience.
He warned that while illicit activities like phishing, social engineering, and robberies thrive, there remains potential for white-collar tactics like gray hat operations to benefit from the current industry climate.
Additionally, ZachXBT remarked on the significant regulatory gaps that allow these activities to flourish unchecked. He critiqued the focus on blue-chip protocols instead of targeting violations such as undeclared advertising and other infractions that perpetuate dishonest practices.
During Q1 2025 alone, scams and hacks drained over $2 billion from the crypto sector. Notably, phishing scams constituted over $96 million of this sum, while rug pulls surpassed $300 million, as documented by cybersecurity entity Hacken in their latest report.
Meanwhile, blockchain investigator Taylor Monahan voiced concerns that scammers have little incentive to amend their ways as the pursuit of profit continues to reward fraudulent activities. These incidents underscore the current landscape’s complexity, where rapid financial gains further lure individuals into criminal conduct.
Monahan noted that, in the face of minimal social, financial, or legal deterrents, scams remain alarmingly easy to execute with the promise of quick returns only encouraging bad actors.
Despite this grim appraisal, some scammers have recently faced legal actions. Interestingly, the U.S. Department of Justice, in a recent declaration, revealed a massive asset seizure by the Secret Service, amounting to over $225 million associated with crypto scams.
