Garden just announced that it bridged over $2 billion in tokens, but popular sleuths alleged money laundering. ZachXBT claimed that 25% more of its total volume came from criminal actors.
Other investigators also alleged that North Korean hackers are using the platform, but much information remains unclear. Still, without a real criminal investigation, these community watchdogs might not have the power to stop bad actors.
Is Garden a Money Laundering Operation?
Garden, a young Bitcoin bridging app, recently posted an impressive milestone: the platform successfully bridged over $2 billion in token swaps.
Its founder, Jaz Gurati, celebrated the accomplishment, but it was suddenly met with pushback. ZachXBT, a major crypto sleuth, accused Garden of substantial money laundering with harsh vitriol:
The sleuth later clarified these hostile remarks. For example, he disapproved of prosecution against Tornado Cash because the crypto tumbler was genuinely decentralized. THORChain, too, despite its problems, has organic grassroots appeal, with many clients using it in good faith.
Garden, by contrast, is more centralized, and recently raised its swap limit to 10 BTC. This made it more attractive to illicit actors, who allegedly began using it to launder over $1 million at a time.
ZachXBT claimed that Garden made millions in profits from this money laundering, refusing to return the funds or acknowledge the problem.
DPRK Connections and White Hat Weakness
Granted, ZachXBT has had previous disputes with some of Gurati’s prior business ventures, so he may not be completely neutral.
However, Tayvano echoed his concerns, going a step further. Specifically, she alleged that DPRK-based hackers were conducting money laundering through Garden:
She got into a brief argument with Gurati, telling him to “fuck off” after claiming that Garden doesn’t take user safety or compliance seriously. She didn’t provide specific proof, but stated that the company is certainly aware of any DPRK-related discrepancies.
However, there’s an uncomfortable undercurrent to these proceedings. Even if the sleuths are correct and Garden is earning millions in profit from DPRK-related money laundering, what will that change?
In today’s crypto crime wave, white-hat community investigators have a diminished power to stop actual offenses.
ZachXBT hoped that “a government” would imprison Garden’s team, but it’s unclear who could step up. The US is dramatically reducing crypto enforcement, and international police agencies can take years to investigate illegal operations.
In other words, community backlash might not matter. If Garden really is profiting from money laundering, grassroots support may be irrelevant to its bottom line.
