Garden Finance Accused of Laundering 80% of Stolen $1.4 Billion Crypto

On June 21, 2025, blockchain investigator ZachXBT publicly accused Garden Finance, a decentralized finance (DeFi) platform, of facilitating the laundering of stolen cryptocurrency linked to North Korea’s Lazarus Group. The allegations center around Garden Finance’s role in moving funds stolen during the Lazarus Group’s $1.4 billion Bybit hack earlier this year. ZachXBT’s investigation revealed that over 80% of Garden Finance’s recent fee income was generated by helping to move assets siphoned from Bybit on February 21, 2025. In that attack, Lazarus allegedly exploited simulated approvals to drain over 401,000 ETH — worth around $1.4 billion at the time — from the crypto exchange. According to ZachXBT’s analysis, Garden Finance served as a major laundering route for these stolen assets.

The blockchain data presented by ZachXBT shows that Garden Finance earned about 38.86 BTC in fees, equivalent to roughly $300,000, during just 12 days of activity. In total, Garden is believed to have accrued around $4 million in fees to date. More concerning to critics was the pattern of transactions, where a single party repeatedly added liquidity to the bridge using cbBTC — a Coinbase-wrapped Bitcoin token. This raised red flags about whether the platform’s claim of being decentralized holds up under scrutiny.

Garden Finance’s co-founder, Jaz Gulati, responded to the allegations by rejecting them in strong terms. Gulati argued that the majority of fees — around 30 BTC — had been earned well before the Bybit hack ever took place. He shared internal records, including screenshots from the platform’s Discord channel, showing that substantial fees had been collected by October 2024, months before the Lazarus-linked event. Labeling the accusations as “misinformation,” Gulati defended Garden’s operational integrity, insisting that the bridge remains true to its principles of decentralization and that it was never designed or intended to serve as a laundering tool for criminal enterprises.

The accusations have reignited an ongoing discussion in the crypto community about what true decentralization looks like in the context of blockchain bridges. Garden Finance brands itself as a trustless, decentralized service offering fast Bitcoin transfers across chains. However, if, as alleged, one entity supplied most of the bridge’s liquidity during the period in question, critics argue that the system could functionally resemble a private or semi-centralized exchange — undermining its core selling point.

ZachXBT’s assertions suggest that bad actors might exploit such a setup to launder stolen funds while evading regulatory oversight. This, in turn, raises questions about the responsibilities of DeFi platforms in ensuring that their technologies are not misused. The Garden Finance saga comes at a time when regulators globally are paying closer attention to the role of DeFi in cross-border money laundering. Platforms that present themselves as decentralized could face greater scrutiny if they are seen as conduits for illicit finance.

The Lazarus Group, believed to be linked to North Korea’s state apparatus, has long been associated with cybercrime campaigns aimed at funding sanctioned activities. Their use of crypto mixers, bridges, and DeFi protocols has placed these platforms under the microscope of both law enforcement and financial watchdogs. If proven, the allegations against Garden Finance could fuel calls for tighter regulations on DeFi infrastructure, including requirements for greater transparency, liquidity provider disclosures, and enhanced anti-money-laundering (AML) controls — even in so-called trustless systems.

For now, Garden Finance maintains its position, denying any wrongdoing and highlighting its prior earnings as evidence of compliance. However, the platform’s future could depend on its ability to demonstrate that it has not knowingly facilitated illegal activity, and that its model can withstand independent audits and regulatory reviews. Meanwhile, ZachXBT’s investigation continues to reverberate throughout the crypto community, drawing both praise for shining a light on potential misconduct and criticism from those who argue that decentralized systems should not be judged by the behavior of individual participants.

What is clear is that the Garden Finance controversy underscores a critical juncture for blockchain bridges: as these tools become integral to the future of multi-chain finance, their designs must strike a delicate balance between speed, efficiency, decentralization, and legal compliance. The coming weeks may bring further revelations as independent analysts and regulators take a closer look at Garden’s operations and the broader risks posed by unchecked cross-chain transfers in the crypto ecosystem.