ZachXBT’s “exposes” leads to lawsuit for defamation and conspiracy

TL;DR Breakdown

  • On June 16, it was reported that ZachXBT, a blockchain investigator, is facing a lawsuit for libel from Jeffrey Huang, also known as “MachiBigBrother” on Twitter.
  • The article accuses Huang of being involved in multiple failed pump-and-dump tokens and NFT projects, including Formosa Financial, a treasury management service. 
  • The complaint asserts that Huang did not embezzle funds from the Formosa Financial Project and never had control over the project’s funds, making embezzlement factually impossible.

On June 16, it was reported on social media that ZachXBT, a blockchain investigator, is facing a lawsuit for libel from Jeffrey Huang, also known as “MachiBigBrother” on Twitter. Huang accuses ZachXBT of tarnishing his reputation through false allegations. In response, ZachXBT dismissed the lawsuit as baseless and an attempt to suppress free speech, vowing to fight back.

The dispute centers around a Medium post titled “22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang),” which ZachXBT linked to in a Twitter thread. The article accuses Huang of being involved in multiple failed pump-and-dump tokens and NFT projects, including Formosa Financial, a treasury management service. It alleges that George Hsieh, a co-founder of Formosa Financial, withdrew 11,000 Ether from the project’s treasury.

 According to the article, Hsieh then left the project, and the drained funds were subsequently sent to various wallet accounts, including one associated with the ENS domain harrisonhuang.eth. ZachXBT claims that these addresses are connected to Jeff Huang/Mithril based on blockchain data analysis.

Huang’s lawsuit against ZachXBT

In response, Huang’s attorney filed a complaint on June 15 in the United States District Court for the Western District of Texas, Austin Division. The complaint asserts that Huang did not embezzle funds from the Formosa Financial Project and never had control over the project’s funds, making embezzlement factually impossible. Huang’s legal team argues that it is more plausible that the founders of the project orchestrated the transfers rather than an outside advisor like Huang.

Additionally, Huang’s lawsuit alleges that ZachXBT published the article to generate donations and monetary benefits. However, ZachXBT denies these allegations on Twitter, claiming that Huang is attempting to silence him. He expressed his disappointment at the situation, noting that speaking the truth sometimes leads to backlash.

ZachXBT has gained a reputation for exposing crypto scams and exploits. Recently, on June 10, he uncovered activity linked to $1 million drained through Twitter phishing scams. Earlier, on June 4, he revealed an estimated loss of $35 million resulting from an exploit of the Atomic Wallet app.

As the legal battle unfolds, the accusations and counter-accusations between ZachXBT and Huang will likely be scrutinized in court. It remains to be seen how the lawsuit will impact the reputations and careers of both individuals involved.

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