In a startling revelation, blockchain investigator ZachXBT has accused Garden Finance of being a conduit for laundering funds tied to significant crypto thefts, most notably the Bybit hack. Garden Finance, which promotes itself as the ‘fastest Bitcoin bridge,’ is allegedly involved in transactions linked to the notorious North Korean Lazarus Group.
The Allegations:
On June 21, ZachXBT took to social media platform X to assert that more than 80% of Garden Finance’s recent fee revenue originated from illicit transactions. These transactions are supposedly connected to the Lazarus Group, known for its cybercriminal activities. ZachXBT’s accusation was a direct response to Jaz Gulati, co-founder of Garden Finance, who had previously celebrated the platform’s financial success. Gulati highlighted that the platform had accumulated 38.86 Bitcoin (BTC) in fees, equating to $300,000 over a 12-day period ending June 2.
ZachXBT challenged Gulati’s omission of critical details, stating, ‘You conveniently left out >80% of your fees came from Chinese launderers moving Lazarus Group funds from the Bybit hack.’
Decentralization Claims Disputed:
Further scrutiny was cast on Garden Finance’s operational claims. ZachXBT contended that a singular entity was repetitively replenishing cbBTC liquidity from Coinbase, thus enabling illegal activities. This action contradicts Garden’s assertion of being a trustless and decentralized platform. ZachXBT questioned the authenticity of the decentralization claim, noting, ‘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.’
Gulati’s Defense:
In defense, Jaz Gulati dismissed the allegations as misinformation. He clarified that 30 BTC in fees were accrued before the Bybit incident, challenging the accusation’s validity. Gulati argued that the ‘fake decentralized’ label was unfounded. Garden Finance, according to its Dune Analytics dashboard, boasts the facilitation of over 24,984 BTC in total volume, translating to over $1.5 billion across 40,571 atomic swaps. To date, the platform has amassed 40.11 BTC in fees, with its largest swap reaching 10 BTC.
Cointelegraph attempted to reach out to Gulati for further comments but had not received a response at the time of publication.
Broader Context:
The allegations against Garden Finance add to a growing list of controversies in the crypto world. Recently, Iurii Gugnin, the founder of Evita Pay, was arrested in New York. He faces 22 federal charges related to a money laundering scheme exceeding $530 million. Gugnin’s operation allegedly facilitated stablecoin transactions for clients linked to sanctioned Russian banks, circumventing restrictions to access sensitive US technologies.
Prosecutors claim the laundering operation spanned from June 2023 through January 2025. If convicted, Gugnin faces charges of wire fraud, money laundering, and operating an unlicensed money transmission business, which could lead to a life sentence.
This incident underscores the ongoing challenges in the crypto industry surrounding fraud and financial crime. The revelations serve as a reminder of the importance of robust regulatory frameworks and vigilant monitoring to safeguard against illicit activities within the digital finance ecosystem.
Note: This article is inspired by content from https://cointelegraph.com/news/zachxbt-garden-finance-lazarus-laundering-allegations. It has been rephrased for originality. Images are credited to the original source.