The United States Department of Justice (DOJ) is reportedly begun an investigation into the founders of Saber Labs, Ian, and Dylan Macalinao, CoinDesk reports citing persons familiar with the matter. The probe surrounds how the brothers used various pseudonym identities to create or rather orchestrate inaccurate crypto gain metrics.
The investigation follows a report from August 2022, in which CoinDesk reported that the brothers used a web of 11 pseudonymous identities to create an “ecosystem of interlocking financial products that double-and triple-counted deposits by passing tokens between themselves.” The report details that their enterprise boosted a key growth metric for Solana by billions during the height of the 2021 bull market. Ian Macalinao also indicated that this inflated the price of SOL – the native token of the Solana ecosystem.
In a never-published blog, Ian wrote:
The metric to optimize for in Summer 2021 was [total value locked (TVL)]. Continuing, “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.”
DOJ also Probing Cashio and Sunny Aggregator
One of the people familiar with the matter, investigators are also looking for information on the web of cryptocurrency projects that orbited Saber, including DeFi yield-farming app Sunny Aggregator and Cashio. Cashio is a stablecoin project that famously lost million during a hack in March 2022. The reports indicate that Ian Macalinao wrote the code for both of these projects using pseudonym identities.
Ian described how the brothers managed to create the ecosystem:
If an ecosystem is all built by a few people, it does not look as authentic. Adding, “I wanted to make it look like a lot of people were building on our protocol rather than ship 20+ disjoint [sic] programs as one person.”
While the DOJ begins its investigation into Saber and the Macalinao brothers, Saber is still operational and over the past 24 hours handled $4.34 million in trading volume according to its website. Ian continues to work to maintain the project infrastructure, but Saber’s Discord server, a space where users can ask questions and obtain updates regarding the project, remains largely abandoned following the publication of CoinDesk’s original report. The same does however not ring true for the Discord servers of Sunny and Cashio, whose tokens have all but become worthless, and are full of messages from furious customers and investors demanding to know where the project developers have gone.
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