ZachXBT Alleges Garden Finance Launders Hack Funds via Bitcoin Bridge
Blockchain investigator ZachXBT has accused the decentralized Bitcoin bridge platform Garden Finance of laundering stolen funds linked to major hacks, including the $1.4 billion Bybit breach and Lazarus Group attacks. Analysis shows over 80% of its recent $300,000 in fees may derive from illicit sources. ZachXBT highlighted single-entity control of cbBTC liquidity, undermining Garden Finance’s decentralization claims. Co-founder Jaz Gulati defended pre-hack fee revenue but failed to address connections to the WazirX hack. The revelations cast doubt on Bitcoin bridge security and could erode trust in similar DeFi protocols.
Bearish
The allegations against Garden Finance undermine confidence in Bitcoin bridges, a crucial DeFi infrastructure. Historical cases—such as the Wormhole hack and Ronin bridge exploit—triggered market sell-offs and widened risk premiums on cross-chain protocols. Short term, traders may reduce exposure to bridged BTC and related assets, driving downward pressure on bridge token volumes and premiums. Long term, heightened regulatory scrutiny and due diligence demands could stall DeFi adoption, keeping sentiment subdued until proven secure solutions emerge.