OpenSea Former Product Manager Charged With NFT Insider Trading, Says US Attorney

Nathaniel Chastain, 31, of Manhattan, was accused of secretly buying 45 NFTs on 11 separate occasions based on confidential information, say prosecutors.

OpenSea Former Product Manager Charged With NFT Insider Trading, Says US Attorney

Photo Credit: OpenSea

OpenSea NFT marketplace was launched in December 2017

  • A former OpenSea employee has been charged with insider trading
  • Nathaniel Chastain was a former product manager at OpenSea
  • He is the first to be charged with insider trading of digital assets

US prosecutors in Manhattan on Wednesday charged a former product manager at OpenSea, the largest online marketplace for non-fungible tokens, with insider trading, the first such case involving digital assets.

Nathaniel Chastain, 31, of Manhattan, was accused of secretly buying 45 NFTs on 11 separate occasions based on confidential information that the tokens, or others by the same creator, would soon be featured on OpenSea's home page.

Prosecutors said Chastain chose which NFTs to feature, and sold his NFTs shortly after they were featured, typically for two to five times what he paid.

In one instance, Chastain allegedly more than quadrupled his money by purchasing the NFT "Spectrum of a Ramenfication Theory" on September 14, 2021, and selling it early the next morning.

Prosecutors said the scheme ran from June to September 2021, with Chastain transacting through anonymous digital currency wallets and accounts at OpenSea, also known as Ozone Networks.

"NFTs might be new, but this type of criminal scheme is not," US Attorney Damian Williams in Manhattan said in a statement. "Today's charges demonstrate the commitment of this office to stamping out insider trading - whether it occurs on the stock market or the blockchain."

Chastain pleaded not guilty on Wednesday to wire fraud and money laundering charges, each carrying a maximum 20-year prison term, before US Magistrate Judge Barbara Moses in Manhattan. Bond was set at $100,000 (roughly Rs. 80 lakh).

"When all the facts are known, we are confident he will be exonerated," Chastain's lawyer David Miller said in an email.

Non-fungible tokens are unique digital assets, reflecting ownership of files such as artwork, other images, videos and text, and recorded on a blockchain.

The NFT market totaled about $40 billion (roughly Rs. 3,10,300 crore) in 2021, and more than $37 billion (roughly Rs. 2,87,000 crore) from January to April 2022 though transaction activity has been stabilizing, according to the blockchain data firm Chainalysis.

"When we learned of Nate's behavior, we initiated an investigation and ultimately asked him to leave the company," OpenSea said in a statement about Chastain. "His behavior was in violation of our employee policies and in direct conflict with our core values and principles."

© Thomson Reuters 2022

Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Affiliate links may be automatically generated - see our ethics statement for details.

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

ExpressVPN Removes India-Based VPN Servers Over Government Order: 10 Points to Explain the Development
Instagram Amber Alerts Feature to Help Find Missing Children Rolling Out Now
Share on Facebook Gadgets360 Twitter Share Tweet Snapchat Share Reddit Comment google-newsGoogle News


Follow Us
© Copyright Red Pixels Ventures Limited 2024. All rights reserved.
Trending Products »
Latest Tech News »