Nathaniel Chastain, who was a product manager at non-fungible token (NFT) marketplace OpenSea, was found guilty of fraud and money laundering on Wednesday.
Former OpenSea Manager Convicted of Insider Trading
Nathaniel Chastain, who was a product manager at non-fungible token (NFT) marketplace OpenSea, was found guilty of fraud and money laundering on Wednesday. He used confidential information about which NFTs would be featured on the OpenSea homepage to make illicit trades and earn more than $50,000 in profit. This was the first case of insider trading involving digital assets, according to federal prosecutors in Manhattan.
Chastain denied the charges and claimed that he did not know that he was violating any rules or policies of OpenSea. His lawyers argued that the company did not treat the information about the homepage features as secret or sensitive. However, the prosecutors showed that Chastain used anonymous accounts to hide his transactions and lied to cover his tracks. He also breached the confidentiality agreement he signed with OpenSea when he joined the company.
The verdict could have wider implications for the regulation of digital assets that do not fit into existing frameworks for preventing insider trading. The U.S. Attorney in Manhattan, Damian Williams, said in a statement that Chastain's conduct was "nothing particularly innovative - it was fraud." Chastain is scheduled to be sentenced on Aug. 22 by U.S. District Judge Jesse Furman, who oversaw the trial.
