ZachXBT, a blockchain investigator, has been sued for libel by Jeffrey Huang, also known as “MachiBigBrother” on Twitter. Huang claims that ZachXBT has damaged his reputation through false allegations. ZachXBT responded to the lawsuit by calling it “baseless” and an attempt to chill free speech, pledging to fight back against it.
ZachXBT is known for revealing data on various crypto scams and exploits. In his latest post titled “22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang),” ZachXBT accused Huang of launching “over 10 failed pump and dump tokens and NFT projects,” including treasury management service Formosa Financial.
Huang’s attorney filed a complaint on June 15 in the United States District Court for the Western District of Texas, Austin Division. Huang’s legal team claimed that the founders of the project were most likely the ones who stole the ETH from the treasury, as ZachXBT’s arguments “fail 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.”
The Allegations
In his article, ZachXBT claimed that Formosa Financial co-founder George Hsieh removed 11,000 Ether (ETH) from the project’s treasury. 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.
In combination with other blockchain data, ZachXBT concluded that “these addresses tie back to Jeff Huang/Mithril.” ZachXBT blamed Jeff Huang for the draining of funds, stating “This 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.”
ZachXBT’s Defense
ZachXBT denied the allegations that he was trying to earn money from donations as a result of his work as an on-chain sleuth. He also stated that Huang was trying to silence him and that it was sickening to see it come to this. He believes that the lawsuit is an attempt to chill free speech and pledged to fight back against it.
Blockchain investigator ZachXBT has been sued for libel by Jeffrey Huang, also known as “MachiBigBrother” on Twitter. Huang claims that ZachXBT has damaged his reputation through false allegations. ZachXBT accused Huang of launching “over 10 failed pump and dump tokens and NFT projects,” including treasury management service Formosa Financial. Huang’s legal team claimed that the founders of the project were most likely the ones who stole the ETH from the treasury. ZachXBT denied the allegations and stated that Huang was trying to silence him. The case is still ongoing.