Bitcoin-Bridge Accused of Laundering Funds from Bybit Hack

ZachXBT, a prominent blockchain investigator, has accused Garden Finance, a Bitcoin-native DeFi protocol, of laundering cryptocurrency. The allegations, unveiled on June 21, point to illicit activity involving the Bybit hack orchestrated by the Lazarus Group.

The accusations against Garden Finance indicate potential irregularities in DeFi protocols’ handling of cryptocurrency transactions. As stakeholders analyze ZachXBT’s claims, concerns over transparency and regulation in the financial tech sector intensify.

Garden Finance’s co-founder, Jaz Gulati, highlighted the protocol’s fee revenue, around 38.86 BTC, amid allegations of laundering activities linked to the Bybit hack. ZachXBT claims over 80% of these fees involved laundered funds.

“You conveniently left out >80% of your fees came from Chinese launderers moving Lazarus Group funds from the Bybit hack.” — ZachXBT, Blockchain Investigator

The accusation sparks questions regarding the protocol’s true decentralization.

ZachXBT’s accusations involve a single entity allegedly manipulating cbBTC liquidity through Coinbase. These actions raise concerns over the decentralized claims of Garden Finance, suggesting a potential loophole in the system’s robustness.

The broader implications of these accusations loom large over the DeFi sector. Concerns mount regarding the industry’s ability to detect illicit activities effectively. These ongoing issues signal a need for more stringent regulatory measures to ensure financial integrity.

If proven accurate, ZachXBT’s allegations could trigger regulatory scrutiny across Bitcoin DeFi bridges. The potential fallout might lead to policy reassessment and heightened industry safeguards against money laundering activities over decentralized networks.