Crypto sleuth ZachXBT, known for his tireless pursuit of uncovering alleged financial misconduct in the cryptocurrency industry, finds himself at the center of a legal storm. In a surprising turn of events, an entrepreneur he had previously investigated, Jeffrey Huang, has filed a defamation lawsuit against him.
The lawsuit filed recently in the U.S. District Court for the Western District of Texas, alleges ZachXBT defamed MachiBigBrother, “inflicting serious reputational and monetary harm” on him. ZachXBT faces one count of libel and one count of libel per se, according to the complaint.
The Taiwanese-American musician and tech executive also known as Machi Big Brother, embezzled a staggering sum of 22,000 ETH, valued at approximately $37.8 million, from a now-defunct crypto treasury management platform. What makes this case particularly intriguing is that ZachXBT had meticulously supported his allegations with mountains of concrete on-chain data, lending weight to his assertions.
Without any regard for the disastrous effect that public allegations of criminal conduct can produce for the accused individual, [ZachXBT] not only proceeded to publish his defamatory article on Medium.com, he also maliciously promoted the article to his more than 300,000 Twitter followers,” MachiBigBrother’s lawyer reiterated in the complaint.
Meanwhile, ZachXBT has asked his followers to donate crypto to a wallet dedicated to his legal costs, predicting that fighting the lawsuit could cost more than $1 million.
“I am creating a donation address to assist with legal costs associated with the defense of this matter, which could easily exceed $1m USD,” he said. “All leftover funds will be returned on a pro rata basis to contributors.”
At the time of writing, the crypto wallet shared by ZachXBT has received more than $230,000 worth of crypto assets, which include $176,000 USDC, over $31,000 USDT, $10,000 TUSD, and more.
ZachXBT has found increasing popularity within the crypto community for publishing original blockchain data analyses aimed to expose the misdeeds of bad actors populating decentralized finance and Web3 spaces. Most recently, he has been ostensibly investigating the hack of Atomic Wallet, which has seen more than $100 million worth of crypto stolen from users.