US DoJ Launches Investigation into Saber Labs Founders

The United States Department of Justice (DoJ) has set up a probe investigation on the Macalinao brothers, Ian and Dylan, founders of Saber Labs over the creation of false crypto gain metrics using fake identities.

The news was first reported by Coindesk and according to the report, the Saber Labs founders were alleged to have created a network of interconnected financial products that double – and triple-counted cryptocurrency deposits by exchanging tokens among themselves using a web of 11 pseudonymous identities.

The news comes as a major blow to the Solana project as the investigation will focus on fraud and securities violations. Ian claims that their work boosted the price of SOL, Solana’s native token by billions of dollars at the height of the cryptocurrency bull market in 2021.

A person familiar with the matter stated that investigators are looking for information on the network of crypto projects that orbited Saber, which includes Sunny Aggregator and Cashio.

Meanwhile, Saber Labs is still in operation as Ian has tried to preserve the project’s infrastructure. However, Saber’s Discord server, where users may go to ask questions and get updates, is largely dormant.

DoJ Investigates Former FTX CEO

It appears that the DoJ began its year with investigations relating to blockchain financial crimes after 2022 experienced one of the biggest crypto fraud investigations with the abrupt collapse of the bankrupt FTX exchange.

The DoJ had earlier requested that a third party look into the demise of the FTX Derivatives Exchange because the regulators believe that the matter calls for an impartial investigation. The DoJ, therefore, asked the Judge in charge of the bankruptcy proceedings to appoint an examiner to oversee the entire process. 

The DoJ gave the suggestion after it announced that it has set up a criminal investigation on Sam Bankman-Fried, the former CEO of the bankrupt FTX exchange. The DoJ said it was looking into the issues that led Sam Bankman-Fried to experience cash flow issues at his business and ultimately file for Chapter 11 bankruptcy protection.