The Department of Justice is reportedly investigating the founders of Solana stablecoin exchange Saber Labs.
The investigation targets brothers Ian and Dylan Macalinao, CoinDesk reported Wednesday (Jan. 11), citing people familiar with the matter.
According to the CoinDesk report, the probe comes in the wake of a story by the news outlet in August that alleged the Macalinao brothers used a web of 11 pseudonyms to create a network of interconnected financial products that double- and triple-counted cryptocurrency deposits by passing tokens between themselves.
Read more: FTX, Congress, Stablecoins: What 2023 May Bring For Crypto Regulations
This boosted a crucial growth metric for Solana by billions of dollars during the peak of 2021’s cryptocurrency bull market and drove up the price of SOL, the Solana network’s native token, CoinDesk said.
The news comes amid a rash of bad news from the world of cryptocurrency. These stories range from a wave of layoffs to federal investigations into the multi-billion dollar downfall of crypto exchange FTX that revealed what prosecutors say was a “massive, years-long fraud.”
Wednesday saw reports that the Securities and Exchange Commission was investigating the extent of the diligence policies and procedures the blue-chip financial firms and other investors had in place before giving capital to FTX.
PYMNTS noted last month that the Solana network tried to distance itself from another crypto-world figure under federal investigation: FTX founder Sam Bankman-Fried.
Last month, a report from Bloomberg News said the firm’s leaders are taking steps to separate their brand from Bankman-Fried, who had appeared with founder Anatoly Yakovenko at conferences to promote the blockchain.
That was before FTX collapsed and declared bankruptcy and Bankman-Fried was indicted on several federal charges.
“I’m still trying to square what I perceive him to be and like what actually happened,” Yakovenko told Bloomberg. “It just feels really, really jarring.”
Yakovenko added that only about 4% of teams building projects on Solana now were acutely impacted by FTX’s downfall, while 80% had zero exposure to the crypto exchange.
“There’s definitely more to Solana than FTX,” Yakovenko said.
