The world of cryptocurrency crime goes beyond headline-grabbing cases like FTX frauds. It delves into complex, technical threats lurking beneath the surface, as explained by Jennie Levin, a prominent analyst in the field. Levin highlights that while flashy fraud cases capture media attention, it’s the more insidious issues—like exploits in blockchain code or sophisticated phishing campaigns—that pose significant risks to the industry. Regulators, she notes, are still playing catch-up as they try to navigate these murky waters.
The Underbelly of Crypto Crime
While the collapse of platforms such as FTX has certainly shaken the crypto community, Levin points out that the vulnerabilities within blockchain technology itself present a different kind of peril. These aren’t the familiar tales of embezzlement or misuse of funds. They’re the small, often unnoticed loopholes—bugs in smart contracts or weaknesses in cryptographic protocols—that can be exploited by savvy hackers. “The real danger,” Levin says, “lies in the areas that aren’t making headlines.” This sentiment echoes recent events, such as the India CBI Busts Transnational Cybercrime Ring, Seizes $327K in Crypto, highlighting the global nature of these threats.
Regulatory bodies have been scrambling to address these threats. However, the rapid evolution of blockchain technology often leaves them one step behind. Levin underscores the necessity for regulators to enhance their technical proficiency to effectively oversee the industry. “It’s not just about having laws in place; it’s about understanding what those laws need to cover,” she adds.
A Game of Cat and Mouse
The relationship between crypto innovators and regulators can sometimes feel like a game of cat and mouse. On one side, we have developers pushing technological boundaries—on the other, regulators trying to set rules without stifling innovation. Levin believes this dynamic is crucial, yet also fraught with tension. “Innovation doesn’t wait for regulation,” she remarks, “and that’s where the real challenge lies.”
The crypto landscape is peppered with incidents that highlight this struggle. Take, for instance, the notorious DAO hack of 2016, where attackers exploited a vulnerability in a smart contract, siphoning off millions of dollars. Such incidents underscore the need for a regulatory framework that not only reacts to fraud but anticipates it. This is further illustrated by the ongoing Politicians’ memecoins, dropped court cases fuel crypto ‘crime supercycle’, which suggests a cyclical pattern of crime and regulation challenges.
What’s Next for the Industry?
So, where does this leave the cryptocurrency world as of June 2025? Levin is cautiously optimistic. She suggests that the ongoing dialogue between innovators and regulators is beginning to yield results. New legislation, such as Europe’s MiCA regulation, aims to bring clarity and security to the crypto market. Yet, challenges remain. The decentralized nature of blockchain makes it inherently difficult to police, and the global scale of operations often leads to jurisdictional challenges.
The future of crypto crime prevention lies in collaboration, Levin argues. “It’s about building bridges between technologists and regulators,” she says, “only then can we hope to create a secure, yet innovative environment.” As the industry evolves, the need for a proactive approach to security becomes ever more pressing.
In the coming months, experts will be watching how these dynamics unfold. There’s a sense of anticipation—what new threats will emerge, and how will the industry respond? The answers remain elusive, but one thing is clear: the crypto world is at a pivotal crossroads, and the road it chooses to take could shape the future of digital finance for years to come.
Source
This article is based on: There’s more to crypto crime than meets the eye: What you need to know
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
