OpenSea: Former Employee Accused of Money Laundering and Wire Fraud – BeinCrypto

Nathaniel Chastain, a 31-year-old former OpenSea employee, is currently being prosecuted on two counts, namely: wire fraud and money laundering.

Accused of setting up a scheme to make large profits based on confidential information, former OpenSea employee Nate Chastain could face up to 40 years in prison.

According to a indictment released today by the United States Attorney for the Southern District of New York and a senior FBI official, Mr. Chastain allegedly leveraged inside information to buy the NFTs before they were published on the OpenSea homepage and resell them later at much higher prices.

From June 2021 to September 2021, Mr. Chastain reportedly took advantage of buyers agreeing to pay full price for NFTs displayed on the OpenSea homepage and even those whose creators have already been featured on the OpenSea homepage. welcome. Thanks to the inside information he had, Mr. Chastain could know in advance which non-fungible tokens OpenSea intended to publish on its homepage and buy them. Then he would resell them for up to five times their original price.

“NFTs may be new, but this type of criminal scheme is not. As alleged, Nathaniel Chastain betrayed OpenSea by using his confidential business information to make money for personal gain. Today’s charges demonstrate this office’s commitment to fighting insider trading – whether in the stock market or on the blockchain,” said prosecutor Damian Williams.

A poorly crafted NFT scam

In order to evade radar, Chastain used anonymous crypto wallets and accounts on OpenSea, but his scheme did not go unnoticed. Last September, the Twitter account Zuwu tweeted: “Hey @opensea why does it seem like @natechastain has multiple secret wallets and buys your front page NFTs before they get listed then resells them shortly after the spike of hype in order to profit from them and sends them back to his main wallet with his punk on it?”

OpenSea quickly said an “immediate and thorough investigation into the incident” will be launched. Later, the NFT platform confirmed that the incident was being reviewed by a third party. The company then changed its policies to prohibit employees from buying or selling collections actively featured on its marketplace.”

The FBI intervened at the right time

Prosecutor Williams commended the FBI for its work, while thanking the National Cryptocurrency Team for its contribution to the investigation. The Deputy Director in charge of the FBI’s New York Field Office said: “Every time a new investment tool like non-fungible blockchain tokens comes out, there will be people exploiting loopholes to generate earnings. The FBI will continue to aggressively pursue players who choose to manipulate the market in this way.”


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OpenSea: Former Employee Accused of Money Laundering and Wire Fraud – BeinCrypto

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