<\/p>\n
Slow regulations, fear of missing out (FOMO) and growing adoption are powering a crypto crime \u201csupercycle,\u201d according to cybersecurity practitioners.\u00a0<\/p>\n
Crypto crime losses hit a new record in the first half of 2025, beating the previous record set in 2022 and nearly equal to the total losses from all of 2024<\/a>.<\/p>\n Speaking to Cointelegraph, Bill Callahan, a retired DEA agent and cryptocurrency investigator, said a lack of regulation combined with hype and FOMO<\/a> has been playing into criminals\u2019 hands, though he said he wouldn’t necessarily call it a crime supercycle. <\/p>\n \u201cThe rapid proliferation of new crypto assets, particularly memecoins, combined with a surge in retail investors and limited regulatory oversight, creates opportunities for criminal activity, including theft, bogus investment schemes, scams and frauds.\u201d\u00a0<\/p><\/blockquote>\n Callahan said crypto scams likely appeal to bad actors given the offer of anonymity and ease of setting up scams.\u00a0<\/p>\n \u201cWe must remember, the bad guys have time, money and resources on their side to perfect criminal activity, and they don\u2019t need to get it right all the time to still make a handsome profit.\u201d\u00a0<\/p><\/blockquote>\n Blockchain security firm CertiK said in its H1 Hack3d report<\/a> released on July 1 that the average loss per security incident in 2025 has been $4.3 million, with the median loss being $103,996.<\/p>\n <\/p>\n Natalie Newson, a senior blockchain investigator working for CertiK, told Cointelegraph that a \u201cconvergence of conditions\u201d has emboldened bad actors.<\/p>\n \u201cInfluencers and key opinion leaders continue to launch tokens with questionable intent, profiting through tactics like sniping and leaving retail investors exposed,\u201d Newson said.\u00a0<\/p>\n Market surveillance firm Solidus Labs said<\/a> in its May rug pull report that 98.7% of tokens on the token launchpad Pump.fun exhibit characteristics of pump-and-dump schemes.<\/p>\n At the same time, Newson said law enforcement agencies around the world face growing challenges \u2014 limited resources, cross-jurisdictional complexities, and the technical sophistication of cybercriminals.<\/p>\n A July 2024 report from blockchain analysis firm Chainalysis highlighted money laundering techniques<\/a> as a particular challenge for law enforcement agencies and crypto service providers.<\/p>\n \u201cThe result is a widening gap between illicit activity and accountability, creating an increasingly hostile environment for legitimate users and builders.\u201d\u00a0<\/p><\/blockquote>\n She speculates that increased smart contract security<\/a> and user education could turn the tide, but admitted there is no way to stop criminals.\u00a0<\/p>\n Meanwhile, Hank Huang, CEO of Kronos Research, argued regulators have \u201cswung from overreach to underreaction.\u201d\u00a0<\/p>\n He said while early enforcement \u201cwas often harsh,\u201d it\u2019s now swinging too far the other way, and we are \u201cseeing too little accountability.\u201d\u00a0<\/p>\n \u201cThat imbalance creates fertile ground for what feels like a crypto crime supercycle. The fix isn\u2019t more crackdowns; it\u2019s smart, targeted regulation and finding balance to continue driving mass adoption.\u201d<\/p><\/blockquote>\n At the same time, law enforcement worldwide has been stepping up efforts to drive bad actors out of the crypto space, with recent enforcement actions targeting<\/a> darknet marketplaces worldwide.\u00a0\u00a0<\/p>\nRisk vs reward ratio favors crypto criminals<\/h2>\n
Regulators are not harsh enough<\/h2>\n
Zero losses is an impossible task\u00a0<\/h2>\n