DOJ investigates whether two brothers used 11 fake identities to build a De-Fi ecosystem

• The DOJ is investigating two brothers behind a Solana stablecoin exchange for alleged fraud, CoinDesk reported.
• The Macalinao brothers reportedly created 11 fake identities to triple crypto deposits to create a fake de-fi ecosystem.
• Crypto industry comes under close scrutiny after Sam Bankman-Fried collapse of FTX exchange

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The US Department of Justice is investigating two brothers behind a Solana stablecoin exchange that reportedly used 11 fake identities to triple count deposits, according to CoinDesk.

The investigation follows CoinDesk’s earlier exposé in August, which revealed that the Macalinao brothers created a fake decentralized finance ecosystem by passing the triple-counted deposits among themselves. The allegedly fraudulent scheme was set to increase a key metric for the Solana cryptocurrency in 2021.

U.S. authorities are investigating a web of crypto projects circulating Saber, including a de-fi yield farming app Sunny Aggregator and a stablecoin project Cashio, which lost millions of dollars in a hack last March, according to CoinDesk .

The DOJ and Saber Labs did not immediately respond to Insider’s request for comment.

“The metric to optimize for in the summer of 2021 was [total value locked (TVL)],” Ian Macalinao wrote in an unpublished blog spotted by CoinDesk.

“TVL can only count when logs are made separately, so I devised a scheme to maximize Solana’s TVL: I would create logs that would be stacked on top of each other, so a dollar could be counted multiple times,” he added.

In the meantime, Saber continues to operate. According to its website, it processed $4.3 million in trading volume in the last 24 hours.

The crypto industry has faced turmoil and scrutiny following the collapse of Sam Bankman-Fried’s FTX in November, which has since sparked a spate of money laundering and conspiracy allegations.

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