ZachXBT Targets Garden Finance Over Alleged Links to Chinese Launderers and Lazarus Hackers

Blockchain investigator ZachXBT has unleashed a scathing attack on Garden Finance, a DeFi platform, accusing it of being a conduit for laundering funds tied to North Korea’s infamous Lazarus Group. What started as a proud display of revenue by the platform’s co-founder has spiraled into a heated debate about DeFi’s role in facilitating illicit financial flows, exposing the raw tension between innovation and accountability in decentralized systems.

• Main Accusation: ZachXBT alleges over 80% of Garden Finance’s fees are linked to Chinese launderers moving $1.5 billion in Ethereum stolen during the Bybit hack in February 2025.
• Platform Pushback: Co-founder Jaz Gulati counters that a significant portion of fees predates the hack, disputing the timeline of illicit activity.
• Wider Stakes: The controversy spotlights DeFi’s persistent vulnerabilities to money laundering and challenges claims of true decentralization.

The Spark: A Boast Turns Bitter

The conflict ignited when Garden Finance co-founder Jaz Gulati took to X to highlight the platform’s impressive performance, flaunting a Dune Analytics dashboard that showed $300,000 in fees collected over just 12 days. By June 19, 2025, Garden Finance had processed a staggering 24,984 BTC in volume—equivalent to roughly $1.5 billion USD—through over 40,000 atomic swaps, amassing total fees of 40.11 BTC. For those new to the space, atomic swaps are direct, cross-chain trades between users without intermediaries, a feature often celebrated as the epitome of DeFi’s trustless ethos. But ZachXBT, a renowned blockchain sleuth, wasn’t impressed. He responded with a blistering critique, suggesting that the platform’s glittering numbers mask a much darker reality.

ZachXBT’s allegations cut deep. He claims that over 80% of those fees are tied to Chinese laundering operations moving funds stolen in the Bybit hack on February 21, 2025—a heist that saw attackers loot $1.5 billion worth of Ethereum by exploiting a developer tied to SAFE Wallet, a tool used by Bybit customers. He also hinted at connections to the WazirX hack from July 18, 2024, where Lazarus Group, a North Korean state-sponsored hacking outfit, drained over $230 million by forging smart contract signatures to bypass multisig wallet protections. Multisig wallets, for the uninitiated, require multiple private keys to greenlight transactions, a safeguard that proved useless against Lazarus’ sophisticated tactics.

ZachXBT pulled no punches, stating, “You conveniently left out >80% of your fees came from Chinese launderers moving Lazarus Group funds from the Bybit hack. Who are you building for again?”

Decentralization Under Fire

ZachXBT didn’t stop at the source of the funds. He went straight for the jugular, questioning whether Garden Finance can even call itself decentralized. Observing transactions in real time over several days, he alleges a single entity repeatedly injected liquidity from Coinbase using wrapped Bitcoin assets like base-cbBTC, directly enabling the launderers to shuffle Bybit’s stolen funds. Think of cbBTC as a digital IOU for Bitcoin, allowing it to flow across different blockchains for DeFi use. If ZachXBT’s scathing accusations against Garden Finance hold, this suggests a glaring centralized choke point in a platform that markets itself as trustless.

ZachXBT pressed hard: “Explain how it is ‘decentralized’ when I watched in real time for multiple days as a single entity kept topping up liquidity from Coinbase for the Chinese launderers as they continued moving Bybit funds?”

Gulati pushed back, pointing to a Discord screenshot dated October 24, 2024, to argue that 30 BTC of the platform’s fees were earned before the Bybit hack even happened. It’s a plausible defense on paper, implying not all revenue is tied to post-hack shenanigans. But it dodges the core of ZachXBT’s accusation: the overwhelming slice of fees allegedly linked to dirty money after the incident, not to mention the unresolved issue of centralized liquidity provision. On-chain data shows Bitcoin swaps on Garden Finance spiked between May and June 2025, with daily volumes nearing 90 transactions in wrapped Bitcoin assets—a timeline that suspiciously aligns with laundering patterns tied to Lazarus Group.

Lazarus Group: The Shadow Behind the Scenes

Let’s widen the lens to the real puppet masters here: the Lazarus Group. Linked to North Korea’s regime, these hackers aren’t your average basement-dwelling scammers—they’re a state-backed cyber army with a track record of jaw-dropping crypto heists. Their methods are as insidious as they are effective, relying on social engineering (think tricking someone into giving up access by posing as a trusted contact), phishing, and malware like TraderTraitor and AppleJeus to infiltrate developer workstations. The Bybit hack exploited a SAFE Wallet developer’s access to siphon $1.5 billion, while the WazirX breach used forged signatures to outsmart multisig defenses. These aren’t isolated wins; UN reports estimate North Korea’s IT workers, often posing as legit developers, pull in at least $600 million annually for the regime, often funneling it toward nuclear programs or other state agendas as detailed in recent analyses of Lazarus Group’s 2025 hacks.

Beyond direct hacks, research shows North Korea has been embedding operatives in the crypto industry since at least 2018, with some estimates suggesting over 50% of job applicants in the space could be DPRK-linked. These actors build trust for years before striking, as seen in smaller heists like the Solareum hack of 2024, which drained $1.4 million. A curious dip in DPRK hacking activity in late 2024—potentially tied to a North Korea-Russia defense pact—contrasts with the massive Bybit hit in 2025, hinting at either a resurgence or a shift in focus. The geopolitical stakes are undeniable, with Japan, the United States, and South Korea issuing joint alerts on Lazarus tactics, while regions like Hong Kong develop crypto tracking tools to curb money laundering.

DeFi’s Dirty Laundry: A Systemic Flaw

Garden Finance’s predicament isn’t a standalone mess—it’s a glaring symptom of DeFi’s systemic weaknesses. Platforms championing decentralization often lack the Know-Your-Customer (KYC) or Anti-Money Laundering (AML) measures that centralized exchanges at least attempt to enforce. Tools like atomic swaps and mixers, designed to protect privacy, end up as perfect hideouts for launderers, obscuring transaction trails with ease. Apparently, “trustless” can also mean “no questions asked” for some platforms. The $1.5 billion in volume Garden Finance processed is a testament to DeFi’s raw potential to upend traditional finance, but if ZachXBT’s numbers are right, it’s also a damning reminder that freedom without guardrails empowers the worst players in the game, as explored in discussions on risks of DeFi platforms like Garden Finance.

Comparing Garden Finance’s transaction volumes to other DeFi platforms, 24,984 BTC over a short span stands out as unusually high, especially when daily swaps peaked near 90 transactions in mid-2025. Is this a sign of organic growth or a red flag for illicit activity? Without robust monitoring, it’s hard to say. What’s clear is that community watchdogs like ZachXBT, who’ve built credibility through past exposés of scams and hacks, are stepping into the breach where regulators lag. His on-chain sleuthing has become a lifeline for accountability, but relying on lone rangers isn’t a long-term fix. DeFi needs to wrestle with balancing its ethos of privacy and freedom against the reality of becoming a glorified laundromat for state-sponsored crime, a vulnerability highlighted in case studies on DeFi money laundering.

Community Pulse and Industry Echoes

The fallout from ZachXBT’s claims has rippled through the crypto community, though concrete reactions remain sparse at this stage. No major DeFi projects have publicly distanced themselves from Garden Finance yet, but on-chain data could soon reveal if users are pulling funds in response to the accusations. Industry voices, including hiring managers cited in recent reports, admit to widespread encounters with suspected North Korean operatives in crypto, with some projects unknowingly employing significant numbers of DPRK-linked developers. This systemic infiltration amplifies the plausibility of platforms like Garden Finance being exploited, whether through negligence or design, sparking heated debates in forums like Reddit threads on DeFi laundering accusations.

ZachXBT’s track record as a relentless exposer of bad actors—Munchables, Delta Prime, and countless rug pulls—lends serious weight to his accusations. If he’s right, Garden Finance isn’t just careless; it’s complicit. And that’s a stain decentralization can’t afford. On the flip side, Gulati’s defense via pre-hack fee data deserves a deeper look. On-chain records could verify if those 30 BTC in fees truly predate the Bybit incident, potentially softening the blow. Until that data surfaces, though, the optics aren’t in Garden Finance’s favor.

What’s Next for Garden Finance and DeFi?

This showdown could be a turning point for Garden Finance—and DeFi at large. If the accusations stick, expect heightened community scrutiny and potential fund withdrawals as trust erodes. Regulatory bodies, already circling crypto with increasing intensity, might seize on cases like this to justify tighter oversight, especially given the geopolitical angle of North Korean involvement. Some speculate this could accelerate self-policing in DeFi, with platforms adopting voluntary on-chain identity tools or partnering with firms like Chainalysis for transaction monitoring. But here’s the rub: such measures risk creeping centralization, clashing with the very ideals DeFi was built on, as noted in reports on ZachXBT’s allegations against Garden Finance.

From a Bitcoin maximalist perspective, this mess underscores BTC’s relative strength. Bitcoin’s transparent ledger makes large-scale laundering harder to conceal compared to the opaque layers of altcoin DeFi protocols. Sure, Bitcoin isn’t immune—mixers and privacy tools exist on its network too—but its design discourages the sheer complexity of abuse seen in cross-chain swaps and liquidity pools. Yet, let’s not pretend Bitcoin can do it all. Altcoin ecosystems and DeFi fill critical niches, offering experimentation and scalability that BTC doesn’t prioritize. The challenge is ensuring those innovations don’t become backdoors for criminals.

Key Takeaways: Unpacking the Garden Finance Controversy

• What did ZachXBT accuse Garden Finance of in 2025?
  ZachXBT alleges that over 80% of Garden Finance’s fees are tied to Chinese launderers moving $1.5 billion in Ethereum stolen during the Bybit hack in February 2025, potentially linked to North Korea’s Lazarus Group.
• How did Garden Finance’s co-founder counter the laundering claims?
  Jaz Gulati insists that 30 BTC of fees were earned before the Bybit hack, pointing to a Discord screenshot from October 2024 to dispute the timeline of illicit activity.
• Why are DeFi platforms like Garden Finance prone to money laundering?
  Without KYC or AML safeguards, DeFi platforms are easy targets for criminals, as tools like atomic swaps obscure transaction trails and enable illicit crypto flows.
• Does Garden Finance operate as a truly decentralized system?
  ZachXBT’s observation of a single entity topping up liquidity from Coinbase raises doubts, suggesting centralized influence in a supposedly trustless platform.
• Why is Lazarus Group a critical threat to crypto security?
  Backed by North Korea, Lazarus Group orchestrates massive hacks like Bybit and WazirX, funneling billions in stolen crypto to fund state agendas like nuclear programs.
• How can DeFi strengthen security while preserving its ethos?
  Options like voluntary on-chain identity verification or transaction monitoring partnerships could help, though they risk diluting DeFi’s commitment to privacy and decentralization.

ZachXBT’s clash with Garden Finance isn’t just a spat over fees—it’s a wake-up call for the entire DeFi space. The promise of financial sovereignty is only as strong as the ability to keep out bad actors. While Bitcoin remains the benchmark for many of us rooting for decentralization, the broader crypto ecosystem must evolve or risk being weaponized by groups like Lazarus. We’re all for accelerating this financial revolution, but not if it means building a playground for state-sponsored crooks. DeFi has the chance to clean house and prove it’s more than a hacker’s haven. If it doesn’t, the trust of the very people it aims to liberate could slip through its fingers.