Former OpenSea head of product Nate Chastain charged with wire fraud and money laundering in an insider trading scheme on the NFT marketplace.
He faces up to 40 years in prison.
The case will be heard by the United States District Court for the Southern District of New York.
The indictment by U.S. Attorney Damian Williams and FBI Assistant Director Michael J. Driscoll in New York states that this is the first-ever insider trading scheme involving digital assets.
In September 2021, OpenSea severed ties with an unnamed employee involved in insider trading. This coincided with Chastain’s departure from the company, who was suspected of wrongdoing. The top executive allegedly used information about token listings on the homepage for personal gain.
According to the indictment, Chastain pre-purchased tokens using anonymous wallets and marketplace accounts.
From June through September 2021, the executive sold these assets two to five times above the purchase price.
The charges indicate that the insider trading ban enforced in traditional markets applies to digital assets.
“NFT is a new phenomenon, but such criminal activity is not. We are demonstrating the department’s commitment to eradicating insider trading,” Williams said.
Platform representatives, in a conversation with The Block, confirmed that following the investigation they offered Chastain to leave the company.
Earlier in September 2021, OpenSea CEO Devin Finzer said that the actions of the dismissed marketplace employee were mischaracterized as insider trading.
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