Sluggish rules, worry of lacking out (FOMO) and rising adoption are powering a crypto crime “supercycle,” in line with cybersecurity practitioners.
Crypto crime losses hit a brand new document within the first half of 2025, beating the earlier document set in 2022 and practically equal to the whole losses from all of 2024.
Chatting with Cointelegraph, Invoice Callahan, a retired DEA agent and cryptocurrency investigator, mentioned an absence of regulation mixed with hype and FOMO has been taking part in into criminals’ arms, although he mentioned he would not essentially name it a criminal offense supercycle.
“The speedy proliferation of recent crypto belongings, significantly memecoins, mixed with a surge in retail buyers and restricted regulatory oversight, creates alternatives for legal exercise, together with theft, bogus funding schemes, scams and frauds.”
Threat vs reward ratio favors crypto criminals
Callahan mentioned crypto scams seemingly enchantment to dangerous actors given the supply of anonymity and ease of organising scams.
“We should keep in mind, the dangerous guys have time, cash and sources on their aspect to good legal exercise, and so they don’t have to get it proper on a regular basis to nonetheless make a good-looking revenue.”
Blockchain safety agency CertiK mentioned in its H1 Hack3d report launched on July 1 that the typical loss per safety incident in 2025 has been $4.3 million, with the median loss being $103,996.
Natalie Newson, a senior blockchain investigator working for CertiK, informed Cointelegraph {that a} “convergence of situations” has emboldened dangerous actors.
“Influencers and key opinion leaders proceed to launch tokens with questionable intent, profiting by way of techniques like sniping and leaving retail buyers uncovered,” Newson mentioned.
Market surveillance agency Solidus Labs mentioned in its Might rug pull report that 98.7% of tokens on the token launchpad Pump.enjoyable exhibit traits of pump-and-dump schemes.
On the identical time, Newson mentioned regulation enforcement companies world wide face rising challenges — restricted sources, cross-jurisdictional complexities, and the technical sophistication of cybercriminals.
A July 2024 report from blockchain evaluation agency Chainalysis highlighted cash laundering strategies as a specific problem for regulation enforcement companies and crypto service suppliers.
“The result’s a widening hole between illicit exercise and accountability, creating an more and more hostile atmosphere for respectable customers and builders.”
She speculates that elevated sensible contract safety and person schooling may flip the tide, however admitted there isn’t any approach to cease criminals.
Regulators usually are not harsh sufficient
In the meantime, Hank Huang, CEO of Kronos Analysis, argued regulators have “swung from overreach to underreaction.”
He mentioned whereas early enforcement “was usually harsh,” it’s now swinging too far the opposite approach, and we’re “seeing too little accountability.”
“That imbalance creates fertile floor for what appears like a crypto crime supercycle. The repair isn’t extra crackdowns; it’s sensible, focused regulation and discovering stability to proceed driving mass adoption.”
Zero losses is an not possible job
On the identical time, regulation enforcement worldwide has been stepping up efforts to drive dangerous actors out of the crypto house, with current enforcement actions concentrating on darknet marketplaces worldwide.
Associated: Crypto crime goes industrial as gangs launch cash, launder billions — UN
Nevertheless, Huang mentioned regardless of the uptick in crackdowns, losses from crypto crime won’t ever hit zero as a result of decentralized markets with nameless contributors will “at all times entice each good and dangerous actors.”
As an alternative of making an attempt to get rid of crypto losses, he mentioned the main target must be on minimizing dangers for customers.
“Different industries are getting hit too, however crypto’s velocity and world entry make it particularly susceptible. These assaults are much less about concentrating on crypto and extra about testing the bounds of rising programs,” Huang mentioned.
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