OpenSea ex-employee charged in first NFT insider trading case

Nathaniel Chastain of Manhattan was accused of secretly shopping for 45 NFTs on 11 separate events based mostly on confidential info that the tokens would quickly be featured on OpenSea's house web page.
SOPA Pictures/LightRocket through Gett

US prosecutors in Manhattan on Wednesday charged a former product supervisor at OpenSea, the most important on-line market for non-fungible tokens, with insider buying and selling, the primary such case involving digital property.

Nathaniel Chastain, 31, of Manhattan, was accused of secretly shopping for 45 NFTs on 11 separate events based mostly on confidential info that the tokens, or others by the identical creator, would quickly be featured on OpenSea’s house web page.

Prosecutors mentioned Chastain offered his NFTs at a revenue shortly after they have been featured, usually two to 5 instances what he paid.

They mentioned that in a single occasion, Chastain greater than quadrupled his cash by buying the NFT “Spectrum of a Ramenfication Concept” on Sept. 14, 2021, and promoting it early the following morning shortly after it was featured.

Prosecutors mentioned the scheme ran from June to September 2021, when Chastain was chargeable for choosing which NFTs could be featured, and that he transacted by way of nameless digital forex wallets and accounts at OpenSea.

Prosecutors mentioned the scheme ran from June to September 2021, when Chastain was chargeable for choosing which NFTs could be featured.

NurPhoto through Getty Pictures

“NFTs could be new, however this sort of legal scheme shouldn't be,” US Lawyer Damian Williams in Manhattan mentioned in an announcement. “At the moment’s expenses show the dedication of this workplace to stamping out insider buying and selling — whether or not it happens on the inventory market or the blockchain.”

Chastain was charged with wire fraud and cash laundering, every carrying a most 20-year jail time period. A lawyer for Chastain couldn't instantly be recognized.

“Once we realized of Nate’s habits, we initiated an investigation and finally requested him to go away the corporate,” OpenSea mentioned in an announcement. “His habits was in violation of our worker insurance policies and in direct battle with our core values and ideas.”