ZachXBT: The Crypto Industry's Crime Supercycle Accelerates, Regulatory Arbitrage, Money Laundering, and Other Activities on the Rise

BlockBeats reported on June 18 that on-chain detective ZachXBT stated on social media that the "super cycle of crime" indeed exists. While the crypto industry has historically provided fertile ground for misuse, this phenomenon has significantly escalated since politicians began issuing meme coins and multiple related cases were dismissed, further fueling malicious activities.

Money laundering syndicates and over-the-counter (OTC) brokers seem to be gaining the upper hand in their contest against the Lazarus Group (a North Korean hacking organization). They have successfully and effortlessly laundered funds from recent hacking incidents involving platforms such as Bybit, DMM Bitcoin, and WazirX. It is estimated that the "black USDT" market on the Tron blockchain is worth between $5 billion to $10 billion, with most of the fund flows remaining untracked effectively.

Some teams knowingly turn a blind eye despite more than 50% of their protocol's transaction volume stemming from stolen funds, continuing to collect fees without taking any action. Key opinion leaders (KOLs) blatantly deceive their followers and project teams, almost never facing any consequences. Courts, hindered by outdated legislation, frequently side with smart contract exploiters. In the current, more lenient environment, the black-and-gray boundaries are stark: those operating in the gray hat space (regulatory arbitrage, laundering channels) are at an advantage, while those in the black hat domain (phishing, social engineering, heists) find themselves in one of the most dangerous periods in history.