Crypto Sleuth ZachXBT Receives Over $1 Million in Donations Following Defamation Lawsuit

Days after ZachXBT, a widely respected blockchain sleuth, disclosed a defamation lawsuit related to one of his previous investigations, the volunteer crypto snoop has inspired over $1 million in donations from across the crypto community to help fund his legal defense.

ZachXBT posted a digital wallet address on Twitter on Friday, alongside comments describing the lawsuit brought by Jeffrey Huang, a Tawainese-American musician and tech entrepreneur, as troubling and a “David and Goliath story.”

Also known as Machi Big Brother online, Huang is suing ZachXBT over an article posted a year ago, in which ZachXBT accuses Huang of embezzling millions of dollars worth of Ethereum from Formosa Financial, a defunct crypto treasury management platform co-founded by Huang. ZachXBT’s claims were backed by on-chain data.

“My understanding is that Machi is very wealthy. I am not,” ZachXBT said. “He is using his money to try [to] silence me.”

ZachXBT said his legal defense could easily cost him more than $1 million, and, within a day, the wallet posted by ZachXBT has accumulated digital assets beyond that goal, consisting largely of stablecoins, according to Nansen Portfolio.

As of this writing, the wallet contains over $650,000 of stablecoin USDC, nearly $274,000 of the stablecoin Tether, and several other tokens such as Ethereum ($284,000) and Polygon ($90,000).

Users from various crypto exchanges are getting involved in the effort. ZachXBT’s wallet received funds from wallets linked to exchanges such as Binance, Bitfinex, Bybit, Coinbase, Kraken, OKX, Uniswap, and 1inch, according to Nansen data.

While thousands of donations are worth less than $100, several transactions are in the $10,000 to $50,000 range, as members from throughout the crypto industry chip in.

That includes a donation made by Binance CEO Cangpeng "CZ" Zhao, who told ZachXBT to “keep up the fight” and “keep the industry transparent.” The move comes as Binance and Zhao himself grapple with a high-profile lawsuit brought by the Securities and Exchange Commission. 

Justin Sun, the founder of Tron and an advisor to crypto exchange Huobi, donated $10,000 worth of the stablecoin True USD to ZachXBT as well, highlighting the sleuth’s role in educating the crypto community, according to a translation of a tweet.

For years, ZachXBT has turned a skeptical eye toward various crypto projects and on-chain events, uncovering bad actors, warning of potential scams, and diving headfirst into hacks to share the root cause of exploits with people on Twitter.

He emerged as one of the leading voices in crypto pseudonymously, cultivating a sense of mystique surrounding his identity. But in Huang’s lawsuit, ZachXBT’s name and place of residence were revealed, shining a spotlight on the sleuth’s identity.

ZachXBT pledged on Friday that leftover funds donated to his legal defense would be returned to contributors on a pro-rata basis, reflective of how much each individual contributed compared to the whole.

And, as the lawsuit against him develops, the Web3 community appears ready to support ZachXBT, sending their hard-earned assets to someone who’s dedicated their time toward making a positive impact on crypto and previously asked for little in return.