Garden Finance Accused of Laundering 80% of Bybit Hack Funds

Garden Finance, a prominent Bitcoin bridge platform, has found itself at the center of a contentious debate following accusations by on-chain investigator ZachXBT. The controversy revolves around allegations that Garden Finance has been involved in laundering funds stolen from the $1.4 billion Bybit hack. ZachXBT's claims have sparked a heated discussion within the crypto community, raising questions about the platform's decentralization and its handling of large transactions.

According to data from Dune Analytics, Garden Finance processed an impressive 24,987 BTC in the second quarter of 2025, amounting to over $1.5 billion across 40,634 atomic swaps. The platform collected 40.16 BTC in fees during this period, with the largest single swap involving 10 BTC. This significant growth in transaction volume and fee collection has positioned Garden Finance as one of the fastest-growing Bitcoin bridges in the crypto sector.

ZachXBT's accusations, posted on X, allege that over 80% of Garden Finance's fees are linked to the laundering of funds from the Bybit hack. He further connected the movement of these hacked funds to Chinese laundering networks allegedly tied to the Lazarus Group. In response, Garden Finance founder Jaz Gulati denied the accusations, citing a previous post from Q4 2024 where the platform received 30 BTC before the Bybit incident. Gulati used this to reject claims that Garden Finance knowingly handled stolen funds.

The debate has also centered on the decentralization of Garden Finance and its control over illicit transactions. ZachXBT described the platform as a "fake decentralized bridge," lacking proper oversight. Gulati dismissed this label as misinformation, asserting that the platform adheres to decentralized processes. Another user, James Scaur, supported Garden Finance, explaining that a Pareto distribution might apply, where one liquidity provider covers most of the swap volume. Scaur argued that this situation does not necessarily indicate centralization.

ZachXBT, however, maintained his stance, accusing a single actor of continuously topping up cbBTC liquidity through Coinbase for illegal transfers. He noted that only one entity had been filling swap orders since the 10 cbBTC cap increase. ZachXBT reported that Garden Finance saw a surge in Bybit-related transactions since April 2025 and claimed the platform was previously warned about this activity but had not taken corrective action. He urged Garden Finance to disable large swaps and return the fees if it could not block illicit activity.

The dispute remains unresolved, with increasing pressure on Garden Finance as further investigation looms. The controversy highlights the broader issues of decentralization and the responsibilities of bridge platforms in handling large transactions, particularly in the context of potential illicit activities. As the crypto community awaits more information, the debate continues to unfold, with both sides presenting their arguments and evidence.