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Crypto Sleuth Served Lawsuit

- Introduction: Who is ZachXBT

- Lawsuit

- Crypto community join forces

- Prominent Crypto Figures and Firms That Pledged Support

- Leftover funds

- Conclusion



Introduction: Who is ZachXBT

ZachXBT is an independent on-chain sleuth who is popular on revealing bad actors in the crypto space. ZachXBT has more than 422.7k followers on Twitter as of June 2023. In his Twitter threads, he names and shames bad actors based on his detailed on-chain research, tracking wallets and transactions involved in phishing scams, rug pulls, hacks, and other attacks.


Lawsuit

On June 16, ZachXBT, a blockchain investigator, was hit with a libel lawsuit by Jeffrey Huang, also known as MachiBigBrother on Twitter. Huang alleges that ZachXBT tarnished his reputation by making false accusations of fraud.


Jeffrey Huang's official Lawsuit Announcement via his twitter account (Machi Big Brother)


ZachXBT vehemently denied the allegations in the lawsuit, describing it as an attempt to stifle freedom of speech. He expressed his determination to fight against the lawsuit.


In a subsequent thread, ZachXBT shared a link to the Medium post that is at the center of the libel accusations. The post titled "22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang)" accuses Huang of being involved in multiple failed pump and dump tokens and NFT projects, including Formosa Financial, a treasury management service.


The Medium Article

22,000 ETH Embezzled and Over Ten Projects Failed_ The Story of Machi Big Brother (Jeff Hu
.
Download • 14.44MB


Among the claims made in the article is that George Hsieh, co-founder of Formosa Financial, allegedly withdrew 11,000 Ether (ETH) from the project's treasury.



After the alleged incident, the article stated that Hsieh departed from the project, leaving other executives in control. According to ZachXBT, the drained funds from the treasury were subsequently transferred to several different wallet accounts, including one that also received funds from the Ethereum Name Service domain harrisonhuang.eth.


Based on additional blockchain data, ZachXBT reached the conclusion that "these addresses are linked to Jeff Huang/Mithril." ZachXBT attributed the responsibility for the fund drain to Jeff Huang, stating, "The provided chart illustrates the inflow of ETH funds from angel/private rounds into the multisig prior to the two 11,000 ETH withdrawals executed by Jeff and George on June 22, 2018.


Cointelegraph obtained the complaint filed on June 15 on behalf of Jeffrey Huang in the United States District Court for the Western District of Texas, Austin Division. According to Huang's attorney, the complaint asserts that his client is not responsible for the depletion of funds from the Formosa Financial project.


Additionally, Huang's legal team argues that the founders of the project are the likely culprits behind the alleged ETH theft from the treasury. They claim that ZachXBT's arguments fail to consider the more plausible explanation that company insiders, rather than an external advisor like Huang, orchestrated the transfers.


The lawsuit further alleges that ZachXBT published the article with the intention of generating donations for himself, suggesting that his motives were financial rather than investigative.


In response to these allegations, ZachXBT took to Twitter on June 16 to refute the claims, asserting that Huang is attempting to silence him. Expressing his disappointment, ZachXBT stated, "It is disheartening to witness this turn of events, but I always knew that speaking the truth sometimes comes with backlash from those who disagree."


Crypto Community Join Forces

Following ZachXBT's plea for assistance on Twitter, there was a notable influx of contributions to his wallet address, comprising significant amounts of stablecoins such as USDC and Tether, along with Ethereum and Polygon tokens. The Web3 community has united in support, standing in solidarity with ZachXBT and actively contributing funds to assist him in his legal defence.


ZachXBT Donation Wallet Address: 0x6eA158145907a1fAc74016087611913A96d96624


Etherscan Link:



Prominent Crypto Figures and Firms That Pledged Support


Sandeep Nailwal


Wallet Sandeep Nailwal used: 0x9696f59E4d72E237BE84fFD425DCaD154Bf96976


Justin Sun


Wallet Justin Sun used: 0x3DdfA8eC3052539b6C9549F12cEA2C295cfF5296



Binance


Johnny Lyu



Jesse Powell


Bankless

Bankless is a media company and educational platform that focuses on decentralized finance (DeFi). They provide valuable content, resources, and insights to help individuals understand and navigate the world of DeFi and open finance. Through articles, podcasts, and guides, Bankless empowers people to take control of their finances and participate in the decentralized economy.


Certik



ZACHXBT Donation wallet tracker:



Leftover Funds

ZachXBT has made a commitment to uphold transparency by promising to refund any remaining donations to supporters in proportion to their contributions.


Conclusion

The ongoing legal proceedings highlight the remarkable financial support received by ZachXBT, underscoring the industry's recognition of his significant contributions and the crypto community's unwavering commitment to aiding individuals who strive to make a positive difference.



Reference

Blackstone, T. (2023) On-chain sleuth zachxbt sued for libel after claiming plaintiff drained funds from Project, Cointelegraph. Available at: https://cointelegraph.com/news/zach-xbt-sued-libel-claimed-plaintiff-drained-funds-from-project (Accessed: 30 June 2023).


Crypto investigator ZACHXBT receives $1 million in donations following defamation lawsuit (no date) Yahoo! Finance. Available at: https://finance.yahoo.com/news/crypto-investigator-zachxbtreceives1030409222.html#:~:text=Notable%20figures%20like%20Changpeng%20Zhao,shown%20their%20support%20for%20ZachXBT. (Accessed: 30 June 2023).





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