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Blockchain investigator ZachXBT has been sued<\/a> for libel by one of the people he accused of fraud, according to a June 16 social media post. According to the post, Jeffrey Huang, known as \u201cMachiBigBrother\u201d on Twitter, has accused ZachXBT of damaging his reputation through false allegations.<\/p>\n MachiBigBrother also posted<\/a> an announcement stating that he is suing the on-chain sleuth.<\/p>\n A year ago, @zachxbt<\/a> published a Medium article about me that damaged my reputation. \u2014 Machi Big Brother (@machibigbrother) June 16, 2023<\/a><\/p><\/blockquote>\n ZachXBT responded to the lawsuit by calling it \u201cbaseless\u201d and \u201can attempt to chill free speech.\u201d He pledged to \u201cfight back\u201d against it. <\/p>\n In a thread responding to his own post, ZachXBT linked to the Medium post that is accused of being libelous. Titled \u201c22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang),\u201d the article accused<\/a>\u00a0Huang of launching \u201cover 10 failed pump and dump tokens and NFT projects,\u201d including treasury management service Formosa Financial.<\/p>\n One of the claims made in the article is that Formosa Financial co-founder George Hsieh removed 11,000 Ether (ETH<\/a>) from the project\u2019s treasury:<\/p>\n \u201cFormosa Financial took a turn for the worse when two withdrawals of 11,000 ETH each were made from the Formosa Financial treasury wallet on June 22nd 2018. Unbeknownst to investors, cofounder George Hsieh acting as the sole director of the company, pushing a share buyback through himself, executing on both sides.\u201d<\/p><\/blockquote>\n The article claimed that Hsieh subsequently left the project, leaving other officers in charge. According to ZachXBT, the funds drained from the treasury were sent to numerous other wallet accounts shortly afterwards, including one that also received funds from ENS domain harrisonhuang.eth. <\/p>\n In combination with other blockchain data, ZachXBT concluded that \u201cthese addresses tie back to Jeff Huang\/Mithril.\u201d ZachXBT blamed Jeff Huang for the draining of funds, stating \u201cThis chart displays the ETH inflows of angel\/private round funds into the multisig before the two 11,000 ETH withdrawals were made by Jeff and George on June 22, 2018.\u201d<\/p>\n Related:\u00a0Project takes off with $31.6M in alleged exit scam<\/em><\/strong><\/a><\/p>\n Cointelegraph has obtained the complaint filed June 15 on behalf of Jeffrey Huang in the United States District Court for the Western District of Texas, Austin Division. In it, Huang\u2019s attorney claims that his client did not drain funds from the Formosa Financial Project, stating:<\/p>\n \u201cNot only did Plaintiff not embezzle funds from the Formosa Financial project, he also never had control of any Formosa Financial funds, making embezzlement factually impossible. Indeed, on information and belief, Defendant understood perfectly well that, as a mere outside adviser to the Formosa Financial project, Plaintiff would have no way of directly accessing the allegedly stolen funds in the first place.\u201d<\/p><\/blockquote>\n Furthermore, Huang\u2019s legal team claimed that the founders of the project were most likely the ones who stole the ETH from the treasury, as ZachXBT\u2019s arguments \u201cfail to account for the much more likely and obvious explanation that company insiders, rather than an outside advisor like Plaintiff, coordinated to orchestrate the transfers.\u201d<\/p>\n The lawsuit also claims that ZachXBT earns money from donations as a result of his work as an on-chain sleuth, which it alleges is the real reason that he published the article.<\/p>\n In his June 16 Twitter thread, ZachXBT denied these allegations, stating that Huang is trying to \u201csilence\u201d him. \u201cIt is sickening to see it come to this,\u201d ZachXBT stated, \u201cbut I knew one day this would happen as the price of telling the truth is sometimes people dislike what you say.\u201d<\/p>\n ZachXBT has previously revealed data on many different crypto scams and exploits. On June 10, he identified activity<\/a> associated with $1 million in crypto drained through Twitter phishing scams. On June 4, he revealed estimates<\/a> that $35 million had been lost from an exploit of the Atomic Wallet app.<\/p>\n<\/div>\n\n
Today, I have filed a defamation lawsuit against him in the United States District Court for the Western District of Texas.<\/p>\n