US authorities launch investigation into Saber Labs over Solana
The US Department of Justice has begun investigating two brothers behind Solana stablecoin exchange Saber Labs Ian and Dylan Macalinao, as reported by Coindesk. The investigation centers around the brothers’ incorporation of various false identities to carry out fraudulent crypto-gaining.
In a sweeping reversal of the allegation slammed on the Saber Labs founders, the brothers had created approximately 11 different identities on the internet in their quest to “build an ecosystem of interlocking financial products that double and triple crypto deposits by transferring tokens between them.”
Nevertheless, Solana enjoyed a massive increase in key growth metrics as it raised billions of dollars in 2021, and according to Ian, appreciated SOL, the original token of the Solana network.
“The calculation to optimize for summer 2021 was [total value locked (TVL)]”, Ian wrote in a never-before-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 wanted to build protocols that stacked on top of each other, so that one dollar could be counted multiple times.”
More details on the Saber Labs anomaly on the Solana project
One of the sources stated that investigators are looking for information online of crypto projects that orbited Sabre. Sunny Aggregator, a decentralized finance (DeFi) yield farming tool, and Cashio, a stablecoin startup that suffered a hack in March and lost millions of dollars, are examples of this. Ian used fictitious identities to write the code for both projects in secret.
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Last year, one of the most important financial crimes in history occurred in the crypto sector. FTX scams happened when many least expected; it was a fallow period, the bearish pull had confused traders, and there was no asylum to run to to cover the painful losses. That case was left hanging for as long as possible. It led to the collapse of several promising crypto-tech startups.
There is another one, and the US authorities have decided not to let this one get away. The authorities are investigating another possible financial crime that could affect the market state.
Ian and Dylan allegedly created unreal virtual identities that would “double and triple” counting crypto deposits by “passing tokens between them”. Coindesk also successfully accessed an unpublished blog by Ian Macalinao which indicated: “The calculation to optimize for summer 2021 was total [total value locked (TVL)]”, according to the report.
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On the other hand, investigators are looking at Sabre’s various crypto initiatives. These include Defi app Sunny Aggregator and stablecoin project Cashio, which was hacked in March and lost millions of dollars.
Ian allegedly used similar fictitious identities to write both codes. “An ecosystem doesn’t look as authentic if a small number of individuals completely construct it,” he said. “Instead of releasing 20+ different apps as a single individual, I wanted to make it look like a lot of people built on our protocol,” the author continued.
As we move forward, many investors and traders will be hoping that the investigation doesn’t hurt the mining crypto sector too much. The trauma of witnessing the FTX saga and Bankman’s selfish lure may kill any optimism in some users’ minds. The year is as new as spring tucked into a fresh morning sunset. The prayer of many crypto investors coming into the year is that the market stays free of all kinds of dire and depressing claims.