The cryptocurrency landscape is currently grappling with a surge in criminal activity, fueled by a combination of factors that cybersecurity experts are calling a crypto crime "supercycle". Losses from crypto-related crimes have reached new heights in the first half of 2025, surpassing the total losses recorded in 2024 and exceeding the previous record set in 2022. This alarming trend is attributed to slow regulatory responses, the fear of missing out (FOMO) among investors, and the increasing adoption of digital assets.
Bill Callahan, a retired DEA agent and cryptocurrency investigator, points to the lack of regulation, coupled with hype and FOMO, as major contributors to the problem. He notes that the rapid emergence of new crypto assets, particularly memecoins, combined with a surge in retail investors and limited regulatory oversight, creates opportunities for various criminal activities, including theft, bogus investment schemes, scams, and fraud.
The anonymity and ease with which scams can be set up in the crypto space make it particularly appealing to criminals. Callahan emphasizes that these actors have ample time, money, and resources to refine their techniques, and they only need to succeed occasionally to reap substantial profits.
CertiK, a blockchain security firm, highlighted the severity of the situation in its H1 Hack3d report released on July 1st. The report revealed that the average loss per security incident in 2025 has been $4.3 million, with the median loss being $103,996. Natalie Newson, a senior blockchain investigator at CertiK, attributes this surge in crime to a "convergence of conditions" that emboldens bad actors. This includes influencers and key opinion leaders launching tokens with questionable intentions, profiting through tactics like sniping, and leaving retail investors vulnerable. Market surveillance firm Solidus Labs reported that a staggering 98.7% of tokens on the token launchpad Pump.fun exhibit characteristics of pump-and-dump schemes.
Law enforcement agencies worldwide are facing growing challenges in combating crypto crime, including limited resources and the complexities of cross-border investigations. The rise of decentralized finance (DeFi) platforms and the increasing use of sophisticated techniques like "chain hopping" to obfuscate transactions further complicate these investigations.
Despite the challenges, efforts are underway to combat crypto crime. Regulatory bodies are beginning to address the gaps in oversight, and blockchain analytics tools are becoming more sophisticated in tracking illicit activities. Increased collaboration between law enforcement agencies, cybersecurity firms, and the crypto industry is also crucial in mitigating the risks and protecting investors.
