Blockchain Investigators: Crypto ‘Supercycle’ of Crime Fueled by Memecoins and Regulation Gaps
Investigative experts in the blockchain space warn of a significant escalation in cryptocurrency-related crime, dubbing the current period a “crime supercycle.” According to analysts citing political memecoins, regulatory inaction, and abandoned legal cases, the environment for illicit crypto activities has become exceptionally favorable.
In a post Thursday, blockchain investigator ZachXBT asserted that cryptocurrency, “historically ripe for abuse,” has seen “noticeably increased” criminal activity since politicians promoted memecoins and numerous court cases were dropped, further enabling illicit behavior.
ZachXBT claimed high-profile crypto influencers and key figures face “zero repercussions” for scamming their followers. “That said,” he added, “there’s never been a worse time to be doing black hat activity vs. gray hat activity when the current environment is favorable.”
Slow Regulation and Enforcement Cited as Factors
ZachXBT pointed to slow-moving or absent regulation as a key contributor to the supercycle. He suggested regulators’ focus on open source developers or blue chip protocols, rather than clamping down on undisclosed advertising or other problematic behaviors, leaves criminals unpunished.
“If they had spent time regulating it instead of going after…”, he implied, “it’s only prevalent because there’s never really been repercussions.”
Cybersecurity data underscores this trend, with Hacken reporting over $2 billion lost to crypto hacks in the first quarter of 2025 alone. This figure includes $96 million lost to phishing scams and over $300 million from “rug pulls,” according to their April report.
Experts Question Sustainability of Criminal Profits
Another blockchain analyst, Taylor Monahan, echoed the sentiment, noting scammers are unlikely to change their ways while profiting substantially. “No social, financial, or legal downsides… around this type of behavior,” Monahan stated. He emphasized the ease and profitability of crypto crime, making it a particularly attractive endeavor.
In a separate view, Monahan believes the crypto space retains too many malicious actors. “Most have gone basically all-in… e.g., romance scams, [North Korea], malware as a service,” he observed. Should crypto disappear, ransomware groups could suffer significant losses.
Some Scammers Are Facing Legal Consequences
Despite the overall surge in crime, law enforcement actions against certain crypto fraudsters have increased. The US Department of Justice reported the Secret Service seizing over $225 million linked to crypto investment scams.
Additionally, a May arrest in New Zealand netted an individual allegedly connected to a global crypto fraud scheme that stole approximately NZD 450 million (around USD 265 million).
Magazine: Influencers shilling memecoin scams face severe legal consequences
