The US Department of Justice is looking into the two brothers who own the Solana stablecoin exchange Saber Labs, Ian and Dylan Macalinao.
The probe comes in response to CoinDesk’s August revelation that the Macalinao brothers built an ecosystem of interconnected financial products that double- and triple-counted cryptocurrency payments by moving tokens between themselves via a network of 11 pseudonymous identities.
During the height of the cryptocurrency bull market in 2021, their work increased a crucial growth measure for Solana by billions of dollars and, according to Ian, enhanced the value of SOL, the network’s native coin.
“The metric to optimize for in Summer 2021 was [total value locked (TVL)],” Ian wrote in a never-published blog post obtained by CoinDesk. “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.”
One of the sources stated that investigators are looking for information on the network of crypto projects that orbited Saber. Sunny Aggregator, a decentralized finance (DeFi) yield-farming tool, and Cashio, a stablecoin startup that suffered a March hack and lost millions of dollars, are examples of this. Ian used fictitious identities to write the code for both projects in secrecy.
“An ecosystem does not appear as real if a small group of individuals entirely constructs it,” Ian wrote. “Instead of shipping 20+ disjointed [sic] apps as one person,” the author says, “I wanted to make it appear like a lot of people were building on our protocol.”
The Macalinao brothers abandoned their intentions to transfer Saber to the Aptos blockchain in the aftermath of CoinDesk’s report. They shut down Protagonist VC, a cryptocurrency venture capital business. And they gave Marinade, another Solana-based DeFi protocol, access to some of their projects that were created under false names.
The brothers’ DeFi ecosystem’s stablecoin exchange, Saber, is still in operation. As of publishing time, its website claimed to process $4.4 million in trade activity during the previous 24 hours.
Although Saber’s Discord channel, where users may go to ask questions and get updates, is not active, Ian has tried to preserve the project’s infrastructure.
Two ventures, Sunny and Cashio, whose token prices have stabilized, are all but gone. Users who are upset are bombarding their Discord servers with questions about where the devs have disappeared.