Pseudonymous blockchain investigator ZachXBT, known for conducting volunteer on-chain investigations into alleged financial misconduct in the cryptocurrency industry, has been sued for defamation by an entrepreneur previously scrutinized by the sleuth. In June 2022, ZachXBT accused Taiwanese-American musician and tech executive Jeffrey Huang, also known as Machi Big Brother, of embezzling 22,000 ETH (worth roughly $37.8 million) from a defunct crypto treasury management platform Huang had co-founded. The accusation was supported by on-chain data.
Huang has since filed a federal lawsuit in the U.S. District Court for the Western District of Texas, alleging that the accusations were false and that ZachXBT is now liable for damages to his reputation. Huang maintains that the allegations are false and looks forward to proving that through the lawsuit.
The process of filing the suit led to the revealing of ZachXBT’s legal name and place of residence, which had been key to his anonymity as a leading voice in the Crypto Twitter community and the wider crypto industry. This information is now publicly available through multiple databases.
In response to the lawsuit, ZachXBT took to Twitter, stating, “The lawsuit is baseless and an attempt to chill free speech. It is sickening to see it come to this, but I knew one day this would happen as the price of telling the truth is sometimes people dislike what you say.” ZachXBT also called on supporters to donate funds for his legal defense, as he plans to fight the lawsuit in court. Interestingly, the wallet address dedicated to his legal defense fund has already received around $320,000 worth of cryptocurrency from over 500 donors, including donations in meme tokens like Jesus Coin, Pepe Coin, and Good Gensler Coin.
ZachXBT appears to have already secured legal representation, securing the services of Brown Rudnick, a Boston-based law firm that has previously worked with the Bahamian government and successfully represented actor Johnny Depp in his defamation lawsuit against Amber Heard. Brown Rudnick partner Stephen Palley commented on Twitter, “Along with Jess Meyers and the team at Brown Rudnick, I’m honored to represent ZachXBT in his ongoing mission to speak truth to power.”
With the increasing scrutiny and accountability in the cryptocurrency industry, the outcome of this lawsuit could have significant implications on industry practices, the balance between anonymity and transparency, and the willingness of blockchain sleuths like ZachXBT to continue voicing their findings. As developments in the case progress, it will be intriguing to observe how the crypto community responds to these emerging challenges.
Source: Decrypt
