OpenSea
OpenSea

Former OpenSea employee sentenced to Prison for NFTs

What To Know

  • Nathanial Chastain, a former employee of OpenSea, has been handed a three-month prison sentence as a result of his involvement in an insider trading scheme related to NFTs (non-fungible tokens).
  • Found guilty of both wire fraud and money laundering, Chastain exploited “confidential information about upcoming NFTs featured on OpenSea’s homepage to benefit financially,” as stated by the US Attorney’s Office for the Southern District of New York.
  • Chastain, who held the authority to choose which NFTs would be showcased on OpenSea’s homepage, faced allegations of selling the tokens he had pre-purchased at a profit once they were widely available and their demand surged.
  • In addition to the prison term, Chastain is mandated to serve three months of home confinement and three years of supervised release.

Nathanial Chastain, a former employee of OpenSea, has been handed a three-month prison sentence as a result of his involvement in an insider trading scheme related to NFTs (non-fungible tokens).

Found guilty of both wire fraud and money laundering, Chastain exploited “confidential information about upcoming NFTs featured on OpenSea’s homepage to benefit financially,” as stated by the US Attorney’s Office for the Southern District of New York.

In 2021, a Twitter user then known as X raised suspicions that Chastain was purchasing NFT drops before the general public could access them. Chastain, who held the authority to choose which NFTs would be showcased on OpenSea’s homepage, faced allegations of selling the tokens he had pre-purchased at a profit once they were widely available and their demand surged.

OpenSea acknowledged Chastain’s involvement in such activities and announced the prohibition of employees using confidential information to trade NFTs.

This incident drew the attention of federal prosecutors, who treated the case akin to typical insider trading scenarios. The US Attorney’s Office revealed that Chastain managed to sell these NFTs for prices ranging between two and five times their original purchase cost.

In addition to the prison term, Chastain is mandated to serve three months of home confinement and three years of supervised release. Furthermore, he is obligated to pay a $50,000 fine and relinquish the Ethereum he had acquired through his illicit NFT trading.

US attorney Damian Williams conveyed in a statement, “Nathanial Chastain faced justice today for betraying the trust his employer had placed in him by exploiting OpenSea’s confidential information for personal profit. This sentence should act as a stern caution to other corporate insiders that engaging in insider trading, regardless of the market, will not be tolerated.”

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