Allegations of Illicit Activity: Garden Finance Under Scrutiny
Blockchain sleuth ZachXBT, known for his diligent on-chain investigations, has leveled serious accusations against Garden Finance, a Bitcoin bridge platform that markets itself as a fast and efficient solution for cross-chain swaps. In a recent post on X (formerly Twitter), ZachXBT claimed that Garden Finance has been facilitating the laundering of funds tied to major crypto thefts, including those connected to the Bybit exchange hack. These allegations have cast a shadow over the platform, raising critical questions about its operational integrity and the true nature of its decentralization.
The Accusations: Fees and the Lazarus Group
ZachXBT‘s central claim is that a significant portion, exceeding 80%, of Garden Finance‘s recent fee revenue stems from illicit transactions. These transactions are allegedly linked to the North Korean Lazarus Group, notorious for their sophisticated cyberattacks and involvement in high-profile crypto thefts. This accusation followed a post by Garden Finance co-founder Jaz Gulati, who highlighted the platform’s recent success, including the collection of 38.86 Bitcoin (BTC) in fees. ZachXBT countered Gulati’s claims, stating that the co-founder “conveniently left out” the details of the platform’s involvement with alleged money laundering activities.
Decentralization Questioned: Liquidity and Centralized Influence
Beyond the accusations of laundering, ZachXBT questioned Garden Finance’s claims of decentralization. He pointed out that a single entity consistently replenished cbBTC liquidity from Coinbase, effectively centralizing the flow of funds and raising concerns about the platform’s purported trustless model. “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,” ZachXBT wrote, challenging the platform’s operational structure. This challenges the core principles many users seek in decentralized applications: transparency and the absence of single points of failure.
Garden Finance‘s Response and the Wider Context
In response to the accusations, Garden Finance founder Jaz Gulati dismissed the claims, calling them misinformation. He pointed out that fees were collected prior to the Bybit incident. However, this response has not fully addressed the core issues raised by ZachXBT, and questions remain about the platform’s vetting processes and the potential risks associated with its operations.
Garden Finance has positioned itself as a fast and secure platform, claiming to enable cross-chain swaps within 30 seconds with zero-custody risk. According to its Dune Analytics dashboard, the project has facilitated over 24,984 BTC in total volume, equivalent to more than $1.5 billion, across 40,571 atomic swaps, suggesting significant user activity.
Implications and the Broader Crypto Landscape
These accusations against Garden Finance highlight the ongoing challenges within the cryptocurrency space, especially regarding money laundering and regulatory compliance. This case, if substantiated, underscores the importance of rigorous due diligence and robust security measures for all crypto platforms. The episode underscores the need for greater transparency and accountability within the industry. As the crypto landscape evolves, ensuring platforms adhere to the highest standards of security and regulatory compliance is paramount to protecting users and fostering trust in the ecosystem.
