Web3 Crime Supercycle: The scale of the black and gray market reaches billions of dollars, and the lack of regulation drives up Money Laundering and Arbitrage activities.

On June 18, on social media, on-chain detective ZachXBT stated that the “crime supercycle” does indeed exist. Although there has always been a breeding ground for abuse in the encryption industry, this phenomenon has significantly intensified since politicians began issuing meme coins and multiple related cases were dismissed, further fueling misconduct.

Money laundering groups and over-the-counter trading brokers seem to have gained the upper hand in the struggle against the Lazarus Group (a North Korean hacking organization), successfully and effortlessly completing money laundering operations for several recent hacking incidents (such as certain trading platforms, DMM Bitcoin, and others). It is estimated that the market size of “black U” on the Tron chain is at least between 5 to 10 billion dollars, and most of the fund flows have not been effectively tracked.

Some teams are well aware that over 50% of the transaction volume in their protocol comes from stolen funds, yet they choose to stand by and collect fees, doing nothing. KOLs openly deceive fans and project parties, and have almost never faced any consequences. Courts often side with smart contract attackers due to outdated laws. In the current environment, when regulations are more lenient, the gray area is clearly defined: those operating in gray hat activities (regulatory arbitrage, money laundering channels, etc.) are at an advantage, while black hats (phishing, social engineering, robbery) are in the historically most dangerous position.