Crypto Detective ZachXBT Faces Defamation Lawsuit
MachiBigBrother has filed suit against ZachXBT over an investigation published by him in June 2022 alleging MachiBigBrother stole millions of dollars worth of crypto from ZachXBT’s portfolio.
Updated June 17, 2023 at 7:35 p.m.
Will Ess of Pixelmind.ai/CoinDesk has made available his CDCrop ZachXBT MI2022 camera.
NFT trader Jeffrey Huang has filed suit against ZachXBT, an independent blockchain detective, after they released a report alleging he embezzled millions in cryptocurrency from MachiBigBrother (also known as ZachXBT).
The lawsuit filed Friday in U.S. District Court for the Western District of Texas claims ZachXBT defamed MachiBigBrother by publishing false accusations that “inflicted serious reputational and monetary harm.” According to the complaint, ZachXBT faces two counts of libel per se as well.
MachiBigBrother’s lawyer detailed in the complaint: “ZachXBT took no consideration for how public allegations of criminal conduct would negatively impact his individual, yet still proceeded with publishing his defamatory article on Medium.com and maliciously promoted it through Twitter accounts with over 300,000.”
MachiBigBrother’s lawyer did not respond quickly to our request for comment.
In his lawsuit, ZachXBT refers to an investigation he published on both his blog and Twitter in June 2022 alleging MachiBigBrother had manipulated cryptocurrency markets and embezzled 22,000 ether – worth an estimated total of approximately $38 Million at that point in time.
ZachXBT responded to the lawsuit on Twitter Friday by labelling it as an archetypical David-and-Goliath battle, while calling himself an advocate of equal justice for both sides of this argument.
ZachXBT tweeted, “My understanding is that Machi[BigBrother] is quite wealthy, while I am not. He appears to be using his wealth as leverage against me.”
On Twitter, the crypto detective lamented that fighting the lawsuit would cost more than $1 million and asked his followers to donate cryptocurrency towards covering his legal costs by setting up a wallet dedicated to this effort.
“I need your assistance so this won’t happen & that the truth survives,” he asked for help from them.
As of publication time, this wallet had received nearly $95,000 worth of crypto donations.
The complaint requests the court order ZachXBT to pay actual and compensatory damages as well as “exemplary damages” of an amount determined by the court, as well as reimburse Jeffrey Huang for any legal fees accrued during any future legal battles between them.
ZachXBT will not halt his investigations while defending against the lawsuit, his attorney from Brown Rudnick Partner Stephen Palley informed CoinDesk.
Palley noted, to his knowledge, the client intends to continue with their work.
“We intend to vigorously defend this lawsuit and protect [ZachXBT] against attempts at silencing his free speech,” stated Mr. Housley.
ZachXBT quickly rose to fame within the crypto community after publishing groundbreaking data analyses allegedly exposing misconduct of bad actors populating decentralized finance and Web3 spaces. These investigations helped him amass an impressive following of over 400,000 Twitter users, earning him recognition by Consensus Magazine as one of their Most Influential 2022 list.
ZachXBT describes himself as an “on-chain sleuth,” often publishing the results of his investigations via Twitter threads or blog posts on Medium. His efforts have led to real arrests as well as so much social media engagement that he had to stop accepting community requests to investigate potential illegalities in crypto sphere last March.
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