AIBC

ZachXBT’s legal battle sees over $1 million donated by crypto supporters

Posted:Jun 23, 2023 14:09 Category: Blockchain , Crypto , Regulatory , Posted by Content Team

Independent blockchain investigator ZachXBT has received over $1 million in donations from the crypto community following a defamation lawsuit brought against him. Binance CEO Changpeng “CZ” Zhao and Tron founder Justin Sun are among the prominent figures supporting ZachXBT.

In June 2022, ZachXBT publicly accused Jeff Huang, also known as Machi Big Brother, of embezzling 22,000 ETH, valued at approximately $37.8 million at the time, from a defunct crypto treasury management platform that Huang had co-founded. ZachXBT supported his claims with on-chain data, which he has been known for employing in his investigations.

Huang has now filed a federal lawsuit in the U.S. District Court for the Western District of Texas. He alleges that the accusations made by ZachXBT are false and have caused significant damage to his reputation. He aims to hold ZachXBT accountable for the purported defamation and seeks damages.

ZachXBT referred to the legal battle as a “David and Goliath story” and expressed concern about Huang, who is allegedly using his wealth to silence him. Recognizing the potentially substantial legal costs involved, ZachXBT shared a digital wallet address on Twitter to seek financial support for his defense.

Support from the crypto community

Within a day, the wallet received over $1 million in digital assets, primarily stablecoins, according to Nansen Portfolio. The wallet currently holds over $650,000 in USDC, nearly $274,000 in Tether, $284,000 in Ethereum, and $90,000 in Polygon.

Contributions to the defense fund came from users on various crypto exchanges, including Binance, Bitfinex, Bybit, Coinbase, Kraken, OKX, Uniswap and 1inch.

While many donations were of small amounts, several larger transactions in the range of $10,000 to $50,000 were also made by individuals within the industry.

CZ made a significant donation and encouraged ZachXBT to persevere in his fight while emphasizing the importance of transparency in the industry. This support comes when Binance and CZ face their own legal challenges with a high-profile lawsuit brought by the SEC.

Meanwhile, Sun donated $10,000 worth of True USD. He also acknowledged the sleuth’s valuable contributions to educating the crypto community.

Anonymity broken

Maintaining anonymity has been crucial for ZachXBT, as he has been publicly scrutinizing powerful figures within the crypto industry for an extended period, but Huang and his legal team managed to uncover ZachXBT’s true identity and place of residence.

Being anonymous has allowed him to be a leading voice in the Crypto Twitter community and the broader crypto industry. However, his legal name has now been revealed in copies of the lawsuit uploaded to public databases.

Upon learning of this development, ZachXBT took to Twitter to inform his followers about the situation.

The lawsuit is baseless and an attempt to chill free speech,” he wrote. “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 acknowledges that he anticipated facing such consequences eventually, as telling the truth can often invite backlash and animosity from those implicated in his investigations.

To defend himself against the lawsuit, ZachXBT acquired legal representation from the law firm Brown Rudnick, which successfully represented actor Johnny Depp in a high-profile defamation suit against former partner Amber Heard.

ZachXBT assured his supporters that any remaining funds donated for his legal defense would be returned pro-rata, ensuring fairness and reflecting each contributor’s relative contribution.

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