Blockchain investigator ZachXBT faces a lawsuit for libel after making false accusations of embezzlement against plaintiff Jeffrey Huang.
Accusations and Lawsuit
ZachXBT finds himself at the center of a legal dispute as MachiBigBrother files a libel lawsuit against him. In a social media post dated June 16, Huang asserts that ZachXBT’s false accusations have tarnished his reputation. Huang further announces his decision to take legal action against the on-chain sleuth.
Refuting the allegations, ZachXBT dismisses the lawsuit as unfounded and an infringement on free speech. He vows to vigorously defend himself against the legal action initiated by Huang.
In a subsequent post, ZachXBT shares a link to the contentious Medium article, titled “22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang).” This forms the crux of the libel claim.
Claims in the Article
The Medium article alleges that Huang was involved in multiple failed pump and dump tokens and NFT projects, including Formosa Financial.
According to the article, co-founder George Hsieh withdrew 11,000 Ether from Formosa Financial’s treasury, prompting ZachXBT to connect the dots. The funds allegedly drained from the project were traced to various wallet accounts. This included one associated with the Ethereum Name Service domain harrisonhuang.eth, leading ZachXBT to implicate Huang in the embezzlement.
In response to the lawsuit, Huang’s legal team, as per the complaint filed on June 15, argues that Huang did not embezzle any funds from the Formosa Financial project.
Further, they emphasized that Huang never had direct access or control over the project’s finances, making the accusation factually impossible. Instead, they suggest that the founders of the project likely orchestrated the transfers, and ZachXBT’s arguments fail to consider this more plausible explanation.
Motives and Denials
Huang’s lawsuit also alleges that ZachXBT published the article as a means to generate donations and monetary support for his work as an on-chain sleuth. ZachXBT vehemently denies these claims, asserting that Huang’s intention is to silence him. He expresses his disappointment at the situation, acknowledging that speaking the truth can sometimes draw people’s ire.
ZachXBT’s Track Record
Prior to this legal dispute, ZachXBT gained recognition for exposing various crypto scams and exploits. On June 10, he uncovered suspicious activity related to $1 million drained through Twitter phishing scams. Additionally, on June 4, he unveiled estimates indicating a loss of $35 million resulting from an exploit in the Atomic Wallet app.
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