Crypto Sleuth ZachXBT Faces Backlash Over $3.87M Meme Token Sales and Donor Ties

A well-known crypto investigator, ZachXBT, has faced growing scrutiny over potential conflicts of interest. The debate intensified after he sold nearly $4 million in meme tokens sent to him without warning. Questions have also arisen about his defence fund and whether donations influenced his investigations.

The controversy began when an anonymous developer sent 50% of a new meme token, $ZACHXBT, directly to ZachXBT’s wallet. The token’s market value briefly surged to around $88 million. He later sold roughly $3.87 million worth of these tokens, sparking criticism from those who believed the funds should have gone to victims of crypto scams.

ZachXBT had launched a community defence fund in 2023 after being sued. Donations poured in from major firms like Binance, Bybit, and Paradigm, as well as wallets linked to Hyperliquid. Critics soon noticed that some of these donors were never investigated by him afterward. One of the most debated cases involves Hyperliquid, which donated 10,000 HYPE tokens—worth up to $600,000—to ZachXBT. Following the donation, his critical coverage of Hyperliquid reportedly slowed. Separately, wallets connected to Polymarket allegedly made $1.2 million in profits before one of his posts, though no direct evidence tied him to the trades. Despite the backlash, ZachXBT has built a reputation for exposing fraud in the crypto industry. His investigations have uncovered over $500 million in scams and exploits across the sector.

The debate over ZachXBT’s independence continues, with critics pointing to his token sales and donor ties. His defence fund and past investigations remain under scrutiny, while supporters argue his work has still exposed major fraud. The situation highlights ongoing concerns about transparency in crypto investigations.