Blockchain investigator ZachXBT is facing a lawsuit for libel filed by Jeffrey Huang, who alleges that his reputation was tarnished by false accusations made by ZachXBT. Huang, also known as MachiBigBrother on Twitter, claims that ZachXBT damaged his reputation through unfounded claims of embezzlement.
ZachXBT responded to the lawsuit by dismissing it as baseless and an attempt to suppress free speech. He vowed to fight back against the allegations made against him.
ZachXBT shared a Medium post in a thread, which he claims is the source of the libelous accusations. The article, titled “22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang),” accused Huang of being involved in the launch of multiple failed projects and claimed that he drained funds from the treasury of Formosa Financial, a treasury management service.
The article alleged that withdrawals of 11,000 ETH each were made from the Formosa Financial treasury wallet in June 2018. It further claimed that the funds were sent to various other wallet accounts, including one associated with the Ethereum Name Service domain harrisonhuang.eth. ZachXBT connected these addresses to Jeff Huang/Mithril based on blockchain data, implicating Huang in the funds’ depletion.
On June 15, a complaint was filed on behalf of Jeffrey Huang in the United States District Court for the Western District of Texas, Austin Division. Huang’s attorney argued that Huang did not embezzle funds from Formosa Financial and did not have direct control over the project’s funds, making embezzlement impossible. The complaint also suggested that the founders of the project were the likely culprits behind the fund transfers.
The lawsuit also claimed that ZachXBT published the article for monetary gain, as he allegedly earns money from donations for his work as an on-chain sleuth.
ZachXBT took to Twitter on June 16 to deny these allegations and expressed disappointment at the attempt to silence him. He stated that he knew such a situation might arise because speaking the truth can sometimes lead to dislike from certain individuals.
ZachXBT has previously exposed various crypto scams and exploits, including identifying Twitter phishing scams that drained $1 million in crypto and revealing a $35 million loss from an exploit of the Atomic Wallet app.
Blockchain investigator ZachXBT is being sued for libel by Jeffrey Huang, who denies the allegations of embezzlement made against him. The case raises questions about the accuracy of the accusations and the motivations behind the publication of the article.
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