Former OpenSea Employee Faces 20 Years For NFTs Insider Trading

According to sources on June 1, U.S. prosecutors have indicted a former product manager of OpenSea for insider trading of NFTs. Nathaniel Chastain is accused of purchasing 45 NFTs using OpenSea’s proprietary information between June and September 2021.

With insider information on numerous NFTs slated for listing on the largest NFTs marketplace in the world, he openly stated that he would favorably showcase NFTs in which he had holdings on the marketplace’s homepage and sell them for a profit as soon as they were up for bidding.

While the prior Product Manager’s program was in effect for three months, he used anonymous non-custodial wallets and trading accounts until OpenSea’s internal inquiry uncovered him. OpenSea stated in a statement that Chastain’s actions were in direct opposition to their basic values and principles.

When we learned of Nate’s behavior, we initiated an investigation and ultimately asked him to leave the company. His behavior was in violation of our employment policies and direct conflict with our core values and principles.

Prosecutors assert that Chastain, by leveraging his powerful position at OpenSea, would earn up to three to five times as much from his NFT sales. In September 2021, Chastain doubled his money after purchasing an NFT from the “Spectrum of a Ramenfication Theory” collection and quickly selling it for a substantial profit.

Eliminating Insider Trading

The charges brought before U.S. Magistrate Judge Barbara Moses to demonstrate their dedication to eradicating insider trading in all markets, even those utilizing blockchain technology.

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

According to Reuters, Chastain pled not guilty to wire fraud and money laundering allegations before U.S. Magistrate Judge Barbara Moses on June 1. If proven guilty, he may face up to 20 years in prison.

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NFTs are tokens issued on public blockchains such as Ethereum and Solana. In contrast to Bitcoin and other digital currencies, they are nique items that have been enabled to trade with blockchain technology.