Blockchain sleuth ZachXBT has leveled serious accusations against Garden Finance, a platform that markets itself as “the fastest Bitcoin bridge,” alleging its involvement in facilitating the laundering of funds tied to major cryptocurrency thefts, including the infamous Bybit hack. In a June 21 post on X, ZachXBT claimed that a staggering over 80% of Garden Finance’s recent fee revenue originated from illicit transactions, which are purportedly linked to the notorious North Korean Lazarus Group. This strong allegation directly challenges Garden Finance’s narrative of being a truly decentralized and trustworthy platform, sparking significant concern within the crypto community regarding its operational integrity.
Allegations of Illicit Fee Revenue
In a direct challenge to Garden Finance’s co-founder Jaz Gulati, who had publicly lauded the platform’s recent success, ZachXBT asserted that over 80% of the platform’s collected fees were tainted. Gulati had previously touted Garden Finance’s achievement of 38.86 Bitcoin in collected fees, with $300,000 earned over the 12 days leading up to June 21. ZachXBT’s counter-claim was sharp: “You conveniently left out >80% of your fees came from Chinese launderers moving Lazarus Group funds from the Bybit hack,” directly implicating the platform in significant illicit financial activity and questioning the source of its touted success.
Centralized Liquidity Fuels Illicit Flows
ZachXBT’s accusations extended to the operational model of Garden Finance itself, alleging that a single actor was continuously topping up cbBTC liquidity from Coinbase. This specific action, according to the blockchain sleuth, effectively fueled the illicit financial flows, directly contradicting Garden Finance’s public claims of operating as a trustless and decentralized model. ZachXBT explicitly challenged this narrative, stating, “Explain how it is ‘decentralized’ when I watched in real time for multiple days as a single entity kept topping up cbBTC liquidity from Coinbase,” highlighting a fundamental inconsistency between the platform’s stated principles and its alleged practices.
Garden Finance Denies Allegations
In response to ZachXBT’s pointed accusations, Garden Finance founder Jaz Gulati issued a firm denial. Gulati countered the claims by pointing out that a substantial 30 BTC in fees had been collected by the platform prior to the Bybit incident, suggesting that not all fee revenue was linked to the alleged hack. He dismissed ZachXBT’s criticism as mere misinformation and unequivocally labeled the accusation of being “fake decentralized” as baseless. Garden Finance continues to maintain its operational claims of enabling cross-chain swaps within 30 seconds while offering zero-custody risk to its users, standing by its core value proposition.
Audit Reveals Massive Volume
According to its Dune Analytics dashboard, Garden Finance boasts a significant operational footprint within the crypto bridging space. The project has reportedly facilitated an impressive over 24,984 BTC in total volume, which translates to more than $1.5 billion in value, through 40,571 atomic swaps. To date, the platform has collected a total of 40.11 BTC in fees, indicating substantial activity. The largest single swap facilitated by Garden Finance reached 10 BTC, showcasing its capacity to handle large transactions, a detail that now comes under scrutiny amidst the laundering allegations.
Arrest in Related Money Laundering Case
Adding to the broader concerns surrounding illicit financial activities in the crypto space, Iurii Gugnin, the founder of crypto payments firm Evita Pay, was recently arrested in New York. He faces a staggering 22 federal charges tied to a sprawling money laundering scheme, allegedly involving over $530 million. According to the U.S. Department of Justice, Gugnin reportedly facilitated stablecoin transactions that enabled clients connected to sanctioned Russian banks, such as Sberbank and VTB, to bypass restrictions and gain access to sensitive U.S. technologies.
Broader Implications for Crypto Integrity
The accusations against Garden Finance by ZachXBT and the parallel arrest of Evita Pay’s founder, Iurii Gugnin, underscore growing integrity challenges within the cryptocurrency ecosystem. These incidents highlight how decentralized platforms, intended for innovation and financial freedom, can be exploited by malicious actors, including state-linked groups, for money laundering and sanctions evasion. Such allegations raise significant questions about the robustness of due diligence, the effectiveness of decentralized claims, and the urgent need for enhanced industry-wide efforts to prevent illicit financial flows and safeguard the reputation of the entire crypto space.
Call for Enhanced Vigilance and Regulation
These recent revelations necessitate enhanced vigilance from both regulatory bodies and the cryptocurrency community. The alleged use of platforms like Garden Finance for laundering hacked funds, coupled with large-scale money laundering schemes, underscores the urgent need for more stringent anti-money laundering (AML) and know-your-customer (KYC) protocols across all crypto services, including decentralized ones. Regulators are increasingly compelled to develop more sophisticated tools and frameworks to track and interdict illicit funds across multiple blockchain networks, ensuring that the promise of crypto innovation is not overshadowed by its misuse for criminal activities.
