The two brothers Ian and Dylan Macalinao, who are the brains behind the Solana stablecoin exchange Saber Labs, are the subject of an investigation by the United States Department of Justice, according to a recent report from the media outlet CoinDesk.
In 2022, it came to light that Ian had fabricated 11 false identities and modified the TVL algorithm in order to build an ecosystem of interlocking financial products. These products double- and triple-counted cryptocurrency deposits by passing tokens between themselves, which resulted in billions of dollars of funds being calculated twice, then again, and again.
According to Ian, the activities of the brothers pushed up the price of SOL, which is the native token of the Solana network. During the height of the bull market in cryptocurrencies in 2021, a major growth measure for Solana was increased by billions of dollars due to their efforts.
“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.”
Online leads on cryptographic endeavors orbiting Saber are being sought by investigators. These include Cashio, a stablecoin business that lost millions of dollars in a hack in March, and the DeFi yield-farming program Sunny Aggregator. Ian, under assumed names, produced the source code for both of these projects.
The siblings abandoned their attempt to transfer Saber to the Aptos blockchain. Protagonist VC, a cryptocurrency investment fund, has closed. Moreover, they gave Marinade, another Solana-based DeFi protocol, authority over several of their previously anonymously developed projects.