Ex-OpenSea employee charged in first-ever NFT insider trading case

The US Attorney’s Office has announced that ex-OpenSea product manager Nathaniel Chastain has been charged with money laundering and wire fraud for allegedly committing insider trading related to non-fungible tokens.

Image credit: 123RF

As part of his job, the 31-year-old was in charge of picking which NFTs were to be placed on OpenSea’s homepage – a confidential matter until the chosen digital assets are published. This is particularly important, as the value of the NFTs and their creator’s other works would often dramatically increase after being exposed on the web page.

Using anonymous OpenSea accounts and digital currency wallets, Chastain would secretly purchase dozens of NFTs before they were published on the site and sell them at 2x to 5x their original prices. This occurred from June to September 2021. Chastain was arrested on June 1, 2022 in New York.

“NFTs might be new, but this type of criminal scheme is not,”  said US Attorney Damian Williams. “Today’s charges demonstrate the commitment of this office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”

With one count of money laundering and one count of wire fraud, Chastain could be facing a maximum prison sentence of 40 years.

See also: Malaysia bans Dickheads NFT