Advertisement
Former OpenSea Head of Product Sentenced to Three Months in Prison for Insider NFT Trading
Nathaniel Chastain, the former head of product at OpenSea, has been sentenced to three months in prison after being convicted of fraud and money laundering.
Three Months In Prison For Insider Trading For The Former Head of Product At OpenSea
Nathaniel Chastain, the former head of product at OpenSea, a prominent NFT (non-fungible token) marketplace, has been sentenced to three months in prison after being convicted of fraud and money laundering.
Chastain’s role involved selecting NFTs to be prominently displayed on OpenSea’s platform. He was found guilty of exploiting his insider knowledge to profit from trading NFTs featured on OpenSea’s homepage.
He was charged with generating illicit gains of more than $50,000 through insider trading of NFTs by the FBI and the U.S. Department of Justice. This was the first time that digital assets were used in an insider trading scheme.
The charges carried a potential sentence of up to 20 years for each offense. While Chastain’s lawyers argued that NFTs are not securities and that the information he used wasn’t confidential, the court disagreed and allowed the case to proceed to trial.
In order to buy and trade the NFTs that would be displayed on the platform’s home page, Chastain set up many digital wallets and OpenSea accounts. His activities were noticed and criticized by the Crypto Twitter community.
Before his arrest in 2021, OpenSea had already investigated his conduct, which they found to have violated OpenSea’s community obligations, resulting in Chastain’s departure from the company. Following his conviction, he has lost equity in the company, which his lawyers claimed was worth millions.
Other cases involving insider trading in digital assets include former product manager at Coinbase, Ishan Wahi, who was sentenced to two years for conspiracy to commit wire fraud, and exploiting inside information about token listings for profit.
