ZachXBT Accuses Garden Finance of Laundering Funds Tied to Major Crypto Hacks

Blockchain watchdog claims over 80% of Garden Finance's fee revenue may stem from illicit activity, raising questions about decentralization.

In a bold allegation that has sparked serious debate across the crypto industry, well-known blockchain investigator ZachXBT has accused Garden Finance, a Bitcoin cross-chain bridge, of playing a key role in laundering stolen crypto assets.

Garden Finance, which promotes itself as “the fastest Bitcoin bridge,” is allegedly enabling the movement of hacked funds — including assets linked to the infamous Bybit hack and the Lazarus Group, a North Korea-linked cybercriminal organization.

80% of Fees Linked to Laundering?

The accusations were made public in a June 21 post on X (formerly Twitter), where ZachXBT stated that over 80% of the platform’s recent fees were derived from transactions associated with stolen funds.

“You conveniently left out >80% of your fees came from Chinese launderers moving Lazarus Group funds from the Bybit hack,” ZachXBT wrote in response to Garden co-founder Jaz Gulati, who had recently highlighted the project’s financial performance — boasting 38.86 BTC in collected fees, with $300,000 earned in just 12 days.

ZachXBT claiming over 80% of Garden Finance’s fees came from launderers. Source: ZachXBT

Source: https://x.com/Cryptostre73188/status/1936361768680407523

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Centralized Control Behind a 'Decentralized' Front?

Despite Garden’s branding as a decentralized and trustless solution, ZachXBT challenged this narrative, alleging that a single actor repeatedly topped up cbBTC liquidity from Coinbase, effectively controlling a large part of the system's flow.

“How is this decentralized,” he asked, “when a single entity controls liquidity and repeatedly tops up funds from a centralized exchange like Coinbase?”

The claim undermines the platform's stated goal of offering zero-custody cross-chain swaps within 30 seconds — a key selling point for its users.

Garden Finance Responds

Garden Finance has strongly denied the allegations. In a public rebuttal, Gulati claimed that 30 BTC in fees were earned before the Bybit hack, insisting that ZachXBT’s claims were misleading and misinformed.

He dismissed the “fake decentralized” label, asserting that the platform remains committed to decentralization and transparency.

Garden’s Rapid Growth

According to data from Dune Analytics, Garden Finance has seen explosive growth since launch:

• Total volume bridged: 24,984 BTC (~$1.5 billion)

• Total swaps processed: 40,571

• Fees collected: 40.11 BTC

• Largest single swap: 10 BTC

Despite these numbers, the controversy now casts a shadow over the legitimacy of some of the platform’s activity and revenue streams.

Source: Dune

$530M Crypto Laundering Scheme Uncovered in U.S.

In related news, Iurii Gugnin, founder of crypto payments platform Evita Pay, was recently arrested in New York on 22 federal charges related to an extensive money laundering operation involving over $530 million.

The U.S. Department of Justice alleges Gugnin facilitated stablecoin transactions that helped Russian clients—linked to sanctioned banks like Sberbank and VTB—circumvent financial restrictions and access sensitive U.S. technologies.

The illicit activity reportedly took place between June 2023 and January 2025, with Gugnin now facing charges including wire fraud, money laundering, and operating an unlicensed money transmission business. If convicted, he could face life in prison.

The Takeaway: Regulation vs. Decentralization

The allegations against Garden Finance and the arrest of Gugnin highlight the growing tension between crypto innovation and regulatory oversight. As blockchain bridges and payment networks scale globally, the risks of misuse — especially by state-sponsored actors — are becoming increasingly difficult to ignore.

For the crypto community, these incidents raise critical questions about how platforms balance decentralization, transparency, and compliance in an evolving regulatory landscape.

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