OpenSea: a former employee is accused of insider trading on NFTs

Stocks or cryptos, same offense – The platform OpenSea has become a key player in the sector of non-fungible tokens (NFT). In September 2021, this success was badly tainted by its product manager, Nate Chastain. This denier was accused by the community of having conducted insider trading within OpenSea. Nearly 9 months later, the case will now be taken to court.

This former OpenSea employee will not escape justice

This is a world first that the cryptosphere would have done well without. The insider trading have long been known in corporate stocks and traditional markets. However, this is a first in the small world of NFT.

A communicated release published on June 1, 2022 on the website of Department of Justice (DoJ) is however formal. Nathaniel” Nate » Chastainformer product manager for OpenSea, will be prosecuted for insider trading. Specifically, he is charged with fraud and money laundering. He would have committed these offenses by exploiting confidential information about the NFTs that were going to be featured on the OpenSea homepage.

The indictment was revealed by District Attorney for the Southern District of New York, Damian Williams. He also announced that Nate Chastain had been arrested in New York the same day.

“NFTs may be new, but this type of criminal system [le délit d’initié] is not. Nathaniel Chastain betrayed OpenSea by using his confidential business information to enrich himself. Today’s indictment demonstrates our commitment to eradicating insider trading. Whether they happen on the stock market or on blockchain. »

Damian Williams, DoJ Attorney from New York

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Sentences of 20 years in prison for this insider trading sauce NFT

This press release also informs us that, from now on, the Federal Bureau of Investigation (FBI) will closely monitor the small universe of non-fungible tokens:

“In this case (…) Chastain launched a well-known scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs before they were featured on the homepage of OpenSea. (…) The FBI will continue to aggressively pursue players who choose to manipulate the markets in this way. »

Michael J. Driscoll, Deputy Director in Charge of the New York FBI Field Office

Between June 2021 and September 2021, Nate Chastain therefore took advantage of his position to to buy NFTs before they are promoted by OpenSea. So he was able to resell them two to five times more expensive after.

The digital fraud and money laundering charges each carry a maximum penalty of 20 years imprisonment to Nate Chastain. As if the sadly usual Ponzi scheme scams and scams were not enough to overwhelm the cryptosphere, so here is the official arrival of insider trading. A kind of ransom of success and mandatory initiatory passage, to make cryptocurrencies an asset class like the others?

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OpenSea: a former employee is accused of insider trading on NFTs

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