As on-chain data becomes more transparent, the crypto industry has fallen into the darkest moral trough. Chain detective ZachXBT recently published an article pointing out that the crypto field has entered a "crime super cycle", with politicians taking the lead in issuing coins, courts revoking multiple controversial lawsuits, and protocol developers turning a blind eye to hackers laundering money. He is worried that the corruption of blockchain may make many on-chain ecosystems unsustainable.
Crime reigns supreme: Protocols turn a blind eye to illegally stolen funds
ZachXBT criticized in the article that the rules of today's crypto world have been reversed, and crime has entered a supercycle, which is more rampant than ever before. He pointed out: "Some protocols have witnessed more than 50% of on-chain activities coming from stolen funds, but the team chose to collect fees and do nothing."
(Hyperliquid has become a money laundering tool and may be a concern for regulators? Security team: James Wynn is also one of them)
Taking the North Korean hacker group Lazarus Group as an example, Zach revealed that it successfully used small OTC over-the-counter traders and some mixing or privacy protocols to launder multiple hacking incidents including Bybit, DMM Bitcoin and WazirX, and this incident also came to nothing:
I estimate that the scale of illegal funds circulating on the Tron chain is at least $5 to $10 billion, and most of it is difficult to trace.
After all, rather than reporting to regulators or freezing black money, the development team is more concerned about maintaining data performance and revenue sources. In the face of interests, ethics have obviously been selectively ignored.
Fraud is justified, and regulators allow KOLs to take the lead in cutting leeks
Not only hackers, Zach also pointed out the complicity structure of social media and KOLs. He said that over the years, there have been countless Internet celebrities, social media influencers (KOLs) and project parties who have not disclosed their paid promotions, which is actually illegal in most jurisdictions, but it always happens:
Government agencies could make $50-100 million by fining all the influencers or projects that never revealed paid advertising over the years. They would probably be better off if they spent their time on regulation instead of going after open source developers or decentralized protocols.
He admitted, "This is common only because there has never really been a serious enough consequence."
(Chinese social media platforms have experienced the largest-scale purge of cryptocurrency influencers since 519! Many KOLs and group chats have been banned)
The logic behind this behavior is cruel and realistic. There are no legal consequences, which means there is almost no possibility of stopping it in the short term.
Does blockchain illuminate the darkness, or amplify it?
In the face of the various scandals in the crypto industry, some users questioned whether blockchain only makes crime more rampant and does not make people see more clearly? Zach responded:
It is both. The on-chain is indeed very transparent, but there is too much money in this field, which makes some people who were not prepared suddenly become complacent, careless and ignore risks after becoming rich, giving hackers many free opportunities to make money.
On the other hand, as MyEtherWallet founder Tayvano said, perhaps the reward system in the crypto space itself has gone off track, with people who do the right thing being punished by law, while those who do RugPull always go unpunished:
I don’t think things will change unless serious developers who create new value are rewarded more than those who extract value and meaninglessly transfer it.
Therefore, she believes that the crypto field will attract more antisocial, selfish and corrupt people, while those honest, cooperative and self-sacrificing builders will be excluded and suppressed. It seems that this is no longer a suitable place to create the future.
(Written after ABCDE Capital’s exit: When VCs leave one after another, is there still a future worth building for crypto?)
The price of short-term profiteering is the collapse of long-term trust and structure
Finally, Zach also pointed out a paradoxical phenomenon: "Now is actually the most profitable time to do bad things", but this also tragically symbolizes that the industry is at its most dangerous turning point.
Looking back at the past six months, when the narrative has become boring, the token launch platform Pump.fun has generated an astonishing revenue of $700 million so far. A gambling platform that is purely for value extraction has become a major player:
Like it or not, gambling is still the primary use case for this industry.
Zach admitted that people are more interested in copying arbitrage models than solving problems. This not only makes fraud more prevalent, but also makes the entire crypto world lose its original core values of "decentralization, trust and innovation."
This article ZachXBT: Politicians lead the peak of crypto crime, and hacking is more profitable than serious construction first appeared in Chain News ABMedia.
