Nate Chastain (Former OpenSea Employee) Accused Of NFT Insider Trading | NFT Culture | NFT News | Interviews and more
Chastain has been charged with wire fraud and money laundering. He allegedly traded sensitive information about the future listing at a digital marketing company for games on OpenC, the judiciary said in a press release. Each of the two charges carries a maximum sentence of 20 years in prison.
This is by far the most high profile case but probably just the beginning. The news is bitterly sweet because such cases give priority to the new asset class but if convicted, the sentence will be 40 years.
“NFTs may be new, but not such a criminal scheme, as alleged, Nathaniel Chastain betrayed OpenSea to make money for himself using his confidential business information. Today’s charges demonstrate the office’s commitment to stop insider trading – it could happen in the stock market or blockchain. “U.S. Attorney Damien Williams
This case relates to insider trading in NFT on OpenSea, the largest online marketplace for NFT trading. In defiance of its employer’s obligation of trust and confidence in OpenCay, CHASTIN has used its advanced knowledge of what NFTs will feature on OpenSea’s homepage for its personal financial gain.
As part of his employment, CHASTIN was responsible for selecting the NFT featured on OpenSea’s homepage. OpenSea keeps the identity of featured NFTs secret until they appear on its homepage. After showing an NFT on the OpenSea homepage, buyers were willing to pay for that NFT and for other NFTs made by the same NFT manufacturer, usually increasing significantly.
At least until June 2021, or approximately September 2021 or so, CHASTIN has used OpenSea’s confidential business information about what NFTs are going to feature on its homepage to secretly purchase dozens of NFTs shortly before it is featured. After those NFTs appeared on OpenSea, CHASTIN sold them for two to five times its initial purchase price. To cover up fraud, CHASTIN conducted these purchases and sales using anonymous digital currency wallets and anonymous accounts on OpenSea.
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