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Never launch an NFT project unless you value your brand!

Brother Maji was exposed for misappropriating company funds and issuing 10 junk projects


On June 16, ZachXBT, a well-known foreign KOL, published a long analysis article revealing that Jeffrey Huang, a well-known Taiwanese entrepreneur and international cryptocurrency KOL, was associated with more than 10 NFT projects, and pointed out that Jeffrey Huang privately misappropriated 22,000 ETH (about 20 million US dollars) from Formosa Finance.


Machida Ge also immediately tweeted: "This is false information. If he wasn't anonymous, I would definitely sue him for defamation."


Clarifying that ZachXBT's article is a false accusation.


Both sides have their own explanations for the whole thing, but there is no doubt that the content of this article has indeed affected the image of Brother Machi, as well as the general public’s views on cryptocurrencies and NFTs.


The project of Maji Big Brother and the whole story


Huang Licheng, whose real name is Huang, is a Taiwanese-American rapper and technology entrepreneur from Taiwan. He entered the crypto space in 2017 and released 10 different projects in the next four years. Each of these projects later disappeared. In order to clarify the context of this matter, we will sort out the information in ZachXBT's article and Huang Licheng's response to the project. Let us introduce all the projects he released in the past four years one by one below.


Item #1 Mithril


Mithril is the first project launched by Huang Licheng. It is a decentralized social media platform that aims to directly reward content creators through its native token MITH (cryptocurrency).


On February 21, 2018, Mithril conducted a private token sale, raising $51.6 million (60,000 ETH), or 30% of the total token supply.


In February 2018, 70% of these private placement tokens were unlocked at the TGE and 30% were unlocked in the following three months.


In April 2018, Mithril was listed on the centralized exchange Bithumb.


In May 2018, these fully unlocked MITH tokens accounted for 89% of the total circulating supply at the time, and subsequently created huge selling pressure.


Due to the unclear team members of this project and the many mechanical methods of pumping and dumping, the ethics of their team have been questioned by the public.

Until 2020, team development had been completely abandoned.


Huang Licheng responded to the content about Mithril


In Ccryptoo’s report, Huang Licheng responded to Mithril’s fundraising experience:


“At that time, I had just entered the cryptocurrency circle and was still learning. I didn’t know there was such a thing as locking positions, so I didn’t lock any positions at the beginning. Later, I learned that many institutions would smash the positions as soon as they got them, and I was very angry because I would be the one responsible if you smashed them.”


Huang Licheng further explained, “At that time, the maximum amount raised seemed to be 12,000 ETH. I asked them to withdraw it because I was responsible for the crash, so they withdrew a lot of money later. I think they only had 6,000 ETH left.”


To this end, Huang Licheng stated that there is a huge difference between his own view and the so-called "big cut" view from the outside world:


"I'm a private equity investor. Ask people who have invested directly through me, has anyone ever lost money?"


“Mithril is awesome! Look, it’s not just Binance, it’s listed on almost all the most important exchanges in the world.” When asked if the Mithril project had been abandoned, Huang Licheng explained that Mithril is still alive and working. Later MachiX and Mith Cash are actually subsidiaries of Mithril.


Project #2 Formosa Financial


Formosa, co-founded by Huang Licheng and Taiwanese politicians George Hsieh, Czhang Lin and Ryan Terribilini, is a treasury management platform built for blockchain companies.


In April 2018, Formosa Finance completed an angel round of financing, raising a total of 22,000 ETH.


In May 2018, Formosa Finance conducted another private fundraising, raising another 22,000 ETH.


At this point, Formosa Finance has raised a total of $23 million (44,000 ETH).


Many well-known investors participated in it, including Binance, QCP Capital, Lemnis Cap, Block One, Miyin/Huang Licheng, Maicoin, Wilson Huang, Leo Cheng’s Syndicate, Blockstate and Block One.


In June 2018, co-founder George Hsieh withdrew 11,000 ETH twice (for a total of 22,000 ETH) from the Formosa Financial treasury wallet.


Majidage and some co-founders gave up their positions, Xie Guoliang transferred 10.5k ETH to Binance, and later deposited the incremental deposits into various Binance accounts and wallets, and made multiple transfers and withdrawals through on-chain data.


ZachXBT told CryptoSlate that June 22, 2018 was the same day that Huang and Xie sold their stakes in the company.


It wasn’t until more than a year after the launch that Formosa Financial’s investors finally learned what had happened to their investments.


On August 12, 2019, Formosa Finance investors received an anonymous email stating that just three weeks after the 2018 ICO, 22,000/44,000 ETH in the Formosa Finance ICO private placement wallet had been invested.


Various internal documents proving this were attached to the email.


Huang Licheng responded to Formosa Financial's content


Regarding the address for raising Formosa Finance funds, Huang Licheng replied that they were all held by the two actual controllers of the project team, "CEO Ryan Terribilini and CTO Lorne Lantz." He also didn't know how the money was transferred, let alone who the two addresses mentioned in the investigative report that misappropriated 22,000 ETH belonged to, and where the total 44,000 ETH raised funds went?


“You should ask the CEO. I’m just a consultant. The investigation report can’t prove that I have any connection with those two addresses.”


"How would I know where the money was spent? I even introduced a group of the best engineers in Taiwan at the time to help him build the product, but in the end, I didn't even see the product. I also think it's ridiculous."


"The only person who really knows who these addresses belong to is Binance, but they didn't come out to speak or prove it today."


For this reason, Brother Maji stated that ZachXBT was unable to provide any evidence to prove who these addresses belonged to, so the subsequent content of this investigation was completely invalid.

The dynamic zone also asked the following questions during the interview:


“Can you provide evidence to prove that these addresses are not yours?”


Brother Maji explains


“Because these addresses are not his own, and he is not a member of the team and has no right to use them, and he does not know the details of the use of funds, so it is difficult for him to produce evidence to prove that these addresses are not his own.”


Project #3 Machi X


Machi X was founded by Huang Licheng and Leo Cheng in October 2018. It’s a social marketplace for intellectual property. However, due to Huang Licheng's previous projects with Mithril and Formosa Finance, they encountered difficulties in obtaining funding.


About a year later, Formosa investors received news via email that 22,000 ETH had been misappropriated.


In this leaked recording from 2019, former Formosa Finance CEO Ryan Terribilini reveals his version of the story about Huang Licheng and Xie Guoliang misappropriating funds.


Project #4 Cream Finance


In 2020, Huang Licheng and Leo Cheng founded Cream Finance (CREAM), a branch of Compound Finance (COMP).


More than $192 million has been stolen from the program through loopholes.


Huang Licheng responded to the content about Cream Finance


Brother Maji mentioned that although Cream was a forked project from Compound, Cream gave 25% of Cream tokens to Compound at the beginning of the project:


“Although their codes are open source, anyone can fork them on the Internet.”


“But think about my main business. I am a musician. MachiX, which I later founded, also deals with copyright. I attach great importance to this matter. Therefore, although I had no obligation, I gave them 25% of the tokens. They were very happy later and they made a lot of money.”


Brother Maji explained, "That's why they took the initiative to become backup for Cream Finance."


When asked about the hundreds of millions of dollars hack of Cream Finance, Maji stressed that this happened after he had left Cream Finance and was taken over by the Yearn team:


“I remember that Mithril seemed to have had four hacking incidents, three of which involved tens of millions of dollars to 160 million dollars, and one smaller incident of more than 1 million dollars. It was when we gave the money to another Taiwanese team, Furucombo, to manage, and they were hacked. These four hacking incidents all happened when Yearn and Andre were in charge, and I was not in charge at that time.”


To this end, Brother Maji also provided two time points:


One is the tweet in which the Yearn team announced the “Merge” with Cream Finance.


The second is the "Unmerge" tweet on February 26, 2022 when the Yearn.finance team told him that they no longer wanted to manage and asked for the return of management rights.


This proves that the four incidents had little to do with him.


Project #5 Wifey Finance


Wifey Finance is a fork of Yearn Finance (YFI) and was founded by an “anonymous” team.


Machi, Leo Cheng, and Wilson Huang are the first members of the Discord channel project.


Transaction records show that Wifey's deployers transferred money to Wilson Huang more than once.


Four days later, Wifey Finance was abandoned.


Project #6 Swag Finance


In October 2020, the adult entertainment website Swag.live launched a governance token.


When Swag was quietly listed as collateral for Cream Finance, the lack of transparency surrounding the listing caused quite a bit of controversy on Twitter. Within weeks, the token was mined, dumped, and delisted from Cream.


Project #7 Mith Cash


On December 30, 2020, an “anonymous” team with Huang Licheng as an advisor launched Mith Cash, a fork of the Basis Cash (BAC) protocol (an algorithmic stablecoin).


Mith Cash grew to $1 billion TVL in just a few days after its launch, but then crashed badly as token holders cashed out their rewards.


Project #8 Typhoon Cash


Typhoon Cash was launched as a fork of Tornado Cash ( TORN ).


The project has an anonymous team, but it is believed that Huang Licheng and his colleagues are behind it.


The project was abandoned just weeks after the protocol began farming.


Project #9 Mud Games


Huang Licheng launched Eternal Heroes, a spinoff of another popular loot-based game.


The project has an anonymous team and has made a profit of over 533.92 ETH.


Team members secretly minted the rarest NFTs.


Project #10 Squid DAO


Squid DAO was launched by an “anonymous” team as a fork of Olympus DAO (OHM), with Huang Licheng being one of the first holders (through his alias: MachiBigBrother.eth) but also shutting down the project in January this year.


The article goes on to say that Huang is now involved in more projects, including X Finance, XY Finance, and Ape Finance. The blog noted common themes of anonymous teams, forked projects, wallets funded through FTX, and short project lifespans.


Huang Licheng also responded to these projects.


“Wilson and Sam from XY Finance and Swag, they used to be in our company. When they started their own projects, I was their advisor, gave them full support in the early stages, and helped them connect to all the best resources.”


“I am the best consultant, but they are their own companies. Many things mentioned in the investigation report have nothing to do with me. You should ask the CEO.”


To this end, the article in the dynamic zone also contacted the founder of XY Finance, Wilson Huang, who was mentioned in the text as receiving the Bored Ape (BAYC) NFT given by Big Brother. He told the dynamic zone:


“Thank you for your concern. The part about me in this article is untrue speculation. The address is not me nor my avatar. My brother was also an early consultant at XY and did not participate in any decision-making.”


“The bear market is coming, my team will continue to build products, and the XY and Steaker teams will continue to launch more services. You will know by following our Twitter updates.”


Our take


In Taiwan, the news about Brother Machi being exposed by ZachXBT, a well-known cryptocurrency KOL, did not seem to be very popular, but we can see the following key points from the news about Brother Machi:

1. Don’t be superstitious about economic models

2. Tools are neither good nor bad, the problem is people

3.

 
 
 

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