Blockchain investigator ZachXBT has been sued for libel by one of the people he accused of fraud, according to a June 16 social media post. According to the post, Jeffrey Huang, known as “MachiBigBrother” on Twitter, has accused ZachXBT of damaging his reputation through false allegations.

MachiBigBrother also posted an announcement stating that he is suing the on-chain sleuth.

A year ago, @zachxbt published a Medium article about me that damaged my reputation.
Today, I have filed a defamation lawsuit against him in the United States District Court for the Western District of Texas.

— Machi Big Brother (@machibigbrother) June 16, 2023

ZachXBT responded to the lawsuit by calling it “baseless” and “an attempt to chill free speech.” He pledged to “fight back” against it.

In a thread responding to his own post, ZachXBT linked to the Medium post that is accused of being libelous. Titled “22,000 ETH Embezzled and Over Ten Projects Failed: The Story of Machi Big Brother (Jeff Huang),” the article accused Huang of launching “over 10 failed pump and dump tokens and NFT projects,” including treasury management service Formosa Financial.

One of the claims made in the article is that Formosa Financial co-founder George Hsieh removed 11,000 Ether (ETH) from the project’s treasury:

“Formosa Financial took a turn for the worse when two withdrawals of 11,000 ETH each were made from the Formosa Financial treasury wallet on June 22nd 2018. Unbeknownst to investors, cofounder George Hsieh acting as the sole director of the company, pushing a share buyback through himself, executing on both sides.”

The article claimed that Hsieh subsequently left the project, leaving other officers in charge. According to ZachXBT, the funds drained from the treasury were sent to numerous other wallet accounts shortly afterwards, including one that also received funds from ENS domain harrisonhuang.eth.

In combination with other blockchain data, ZachXBT concluded that “these addresses tie back to Jeff Huang/Mithril.” ZachXBT blamed Jeff Huang for the draining of funds, stating “This chart displays the ETH inflows of angel/private round funds into the multisig before the two 11,000 ETH withdrawals were made by Jeff and George on June 22, 2018.”

Related: Project takes off with $31.6M in alleged exit scam

Cointelegraph has obtained the complaint filed June 15 on behalf of Jeffrey Huang in the United States District Court for the Western District of Texas, Austin Division. In it, Huang’s attorney claims that his client did not drain funds from the Formosa Financial Project, stating:

“Not only did Plaintiff not embezzle funds from the Formosa Financial project, he also never had control of any Formosa Financial funds, making embezzlement factually impossible. Indeed, on information and belief, Defendant understood perfectly well that, as a mere outside adviser to the Formosa Financial project, Plaintiff would have no way of directly accessing the allegedly stolen funds in the first place.”

Furthermore, Huang’s legal team claimed that the founders of the project were most likely the ones who stole the ETH from the treasury, as ZachXBT’s arguments “fail to account for the much more likely and obvious explanation that company insiders, rather than an outside advisor like Plaintiff, coordinated to orchestrate the transfers.”

The lawsuit also claims that ZachXBT earns money from donations as a result of his work as an on-chain sleuth, which it alleges is the real reason that he published the article.

In his June 16 Twitter thread, ZachXBT denied these allegations, stating that Huang is trying to “silence” him. “It is sickening to see it come to this,” ZachXBT stated, “but I knew one day this would happen as the price of telling the truth is sometimes people dislike what you say.”

ZachXBT has previously revealed data on many different crypto scams and exploits. On June 10, he identified activity associated with $1 million in crypto drained through Twitter phishing scams. On June 4, he revealed estimates that $35 million had been lost from an exploit of the Atomic Wallet app.