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US Department of Justice investigates Solana based DEX Saber protocol for inflated usage statistics

  • The US Department of Justice is investigating a team of two brothers behind Saber, a Solana-based decentralized exchange. 
  • The investigation follows Ian and Dylan Macalinao and their 11 pseudonymous identities that built an ecosystem of interlocking financial products. 
  • The protocol developers edited the Total Volume Locked on Solana based projects, causing billions of dollars of funds to be double-calculated multiple times.
US Department of Justice investigates Solana based DEX Saber protocol for inflated usage statistics
Ekta MouryaEkta MouryaFXStreet

The US Department of Justice (DOJ), a federal executive department of the United States government, is investigating a team of developers associated with Solana-based protocol Saber. The duo is accused of falsifying identities and inflating Total Value Locked statistics, a metric that is used to measure the overall health of a DeFi protocol. 

Also read: Ethereum Shanghai hard fork and token unlock: A complete guide to unstaking ETH

US Department of Justice investigates decentralized exchange on Solana blockchain

The US Federal Law enforcement agency, the Department of Justice is currently investigating Saber Protocol, a decentralized exchange on the Solana blockchain network. Saber facilitates stablecoin swaps on Solana and functions similar to the Curve protocol on the Ethereum blockchain. The DEX allows for low fee swaps of USD-based stablecoins. 

The duo of developers behind the Saber Labs, Ian and Dylan Macalinao are currently under investigation by the DOJ. The brothers are accused of creating a web of false identities and an ecosystem of interlocking financial products that double and triple counts crypto deposits by exchanging tokens within itself. 

Total Value Locked is a key DeFi metric that measures the total value of all assets locked, including all deposits in all the functions that the protocol offers, including staking, lending, and liquidity pools. The falsification of identities created a tangle web of products within the ecosystem that boosted TVL for Solana by billions of dollars during the height of the crypto market’s bull run in 2021. 

The investigation has revealed protocols that are stacked on top of each other to inflate TVL, including yield-farming app Sunny Aggregator, and stablecoin Cashio. 

The stablecoin exchange remains operational, handling a 24-hour trade volume of $39,018. As the DOJ pursues the investigation, the Solana blockchain network and its native token SOL continues to yield gains for holders in the ecosystem. 

SOL has yielded nearly 70% gains for holders of the Ethereum-killer token, in the last two weeks, riding the wave of altcoin price rallies in 2023. 

Author

Ekta Mourya

Ekta Mourya

FXStreet

Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.

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