DOJ Opens Investigation Into Saber Labs Founders Over Solona Stablecoin Discrepancies
The US Department of Justice has reportedly opened a probe into the individuals behind Saber Labs’ stablecoin Solana.
According to sources familiar with the matter, the investigation is focused on brothers Ian and Dylan Macalinao, and is linked to an earlier report by Coindesk which alleged the pair used at least 11 pseudonyms to create an intricate web of interrelated financial products to inflate the growth metrics for Solana by double- and triple-counting cryptocurrency deposits.
The report also suggests that this was done to boost the price of the native token of the Solana network, known as SOL. In a never-published blog post, Ian is quoted as saying “The metric to optimize for in Summer 2021 was [total value locked (TVL)]. TVL can only count if protocols are built separately, so I devised a scheme to maximize Solana’s TVL: I would build protocols that stack on top of each other, such that a dollar could be counted several times.”
According to one source, the DOJ is searching for details on a number of crypto projects that were connected to Saber, including a DeFi yield-farming app known as Sunny Aggregator, and Cashio, a stablecoin project that suffered a hack back in March 2021, resulting in millions of dollars worth of losses. The Coindesk report suggests that Ian wrote the code for both projects using pseudonyms.
Following the CoinDesk report, the Macalinao brothers reportedly abandoned plans to move Saber to a different blockchain, known as Aptos, and transferred control of some of their pseudonymously-built projects to another Solana-based DeFi protocol called Marinade. Additionally, they also exited their crypto venture-capital firm, Protagonist VC. Despite the investigation, the Saber exchange continues to operate.
Information for this briefing was found via Coindesk. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.