On-chain spy ZachXBT sued for defamation after plaintiff claims he siphoned off project funds

Blockchain Inventor ZachXBT has been sued on According to a June 16 social media post, one of the people he accused of fraud sued for libel. Per the post, Jeffrey Huang, known on Twitter as “MachiBigBrother,” accused ZachXBT of damaging his reputation through false accusations.

machibig brother too Posted An announcement stating that he is suing the on-chain spy.

one year ago, @zachxbt Published a Medium article about me that damaged my reputation.
Today, I have filed a defamation suit against her in the United States District Court for the Western District of Texas.

– machi big brother (@machigbrother) June 16, 2023

ZachXBT responded to the lawsuit by calling it “baseless” and “an attempt to silence free speech”. He resolved to “fight back” against it.

In a thread in response to his own post, ZachXBT linked to the Medium post that has been accused of being defamatory. Article titled “22,000 ETH embezzled and more than ten projects failed: The story of Machi Big Brother (Jeff Huang)” accused Huang has launched “over 10 failed pump and dump token and NFT projects,” including treasury management service Formosa Financial.

One of the claims made in the article is that George Hsieh, co-founder of Formosa Financial, removed 11,000 Ether (ETH) from the project’s treasury:

“Formosa Financial took a turn for the worse when two withdrawals of 11,000 ETH each were made from a Formosa Financial treasury wallet on June 22, 2018. Unbeknownst to investors, cofounder George Hsieh, serving as the sole director of the company, held a share Himself, driving the buyback, is executing from both sides.

The article claimed that Sieh later left the project, leaving other executives in charge. According to ZachXBT, the funds withdrawn from the Treasury were soon sent to several other wallet accounts, including one that received funds from the ENS domain harrisonhuang.eth.

Combined with other blockchain data, ZachXBT concluded that “these addresses are linked to Jeff Huang/Mithril.” ZachXBT blames Jeff Huang for the fund withdrawal, stating, “This chart shows the ETH flow of angel/private round funds in Multisig prior to the two 11,000 ETH withdrawals by Jeff and George on June 22, 2018.” Is.”

RELATED: Project Launched With $31.6M in Alleged Withdrawal Scam

Cointelegraph has 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. In it, Huang’s lawyer claims that his client did not withdraw funds from the Formosa Financial Project, stating:

“Plaintiff not only did not embezzle funds from the Formosa Financial Project, but he never had control of any Formosa Financial funds, making the embezzlement factually impossible. In fact, based on information and belief, Defendant was fully well understood that, as merely an outside advisor to the Formosa Financial Project, Plaintiff would have no way of direct access to the funds allegedly stolen.”

Furthermore, Huang’s legal team claimed that the project’s founders were the ones stealing ETH from the Treasury, as ZachXBT’s arguments “fail to account for the more likely and unequivocal explanation from company insiders rather than outside counsel.” Coordinated to organize transfers.

The lawsuit also claims that ZachXBT earns money from the charity as a result of his work as an on-chain sleuth, which it alleges was the reason he published the article.

In his June 16 Twitter thread, ZachXBT denied these allegations, stating that Huang is trying to “silence” him. “It sickened to see,” ZachXBT said, “but I knew it would happen one day because sometimes the price of telling the truth is people dislike what you say.”

ZachXBT has previously revealed data on many different crypto scams and exploits. On June 10, he identified activity involving $1 million in crypto extorted through Twitter phishing scams. On June 4, he estimated that $35 million had been lost using the Atomic Wallet app.