OpenSea’s former product manager Nate Chastain has been convicted of wire fraud and money laundering.
A federal jury in New York found Chastain guilty of using insider information to trade NFTs.
The former executive faces up to 40 years in prison for netting $50,000 from his insider trading scheme.
Nate Chastain, the former Product Manager at NFT marketplace OpenSea, has been convicted by a federal grand jury in New York in the first-ever NFT insider trading case. Chastain’s conviction comes less than two weeks after the first hearing in his case was held in the District Court for the Southern District of New York.
Former OpenSea Executive Faces Up To 40 Years In Prison
According to a report by Reuters, the federal jury found Chastain guilty of money laundering and wire fraud for his role in the NFT insider trading scheme. He faces up to 40 years in prison. The charges were filed against him in June last year by the U.S. Attorney’s Office in Manhattan. As the head of product, Chastain was responsible for picking the digital artworks that would be featured on the NFT marketplace’s homepage.
Federal prosecutors accused the former OpenSea executive of abusing his position at the firm to illegally trade NFTs. He reportedly made more than $50,000 between June 2021 and September 2021 by purchasing NFTs that were about to be listed, and then offloading them after their prices surged. Chastain reportedly tried to cover his tracks by using multiple wallets and accounts to route his funds.
Nathaniel Chastain exploited his advanced knowledge of which NFTs would be featured on OpenSea’s website to make profitable trades for himself. Although this case involved trades in novel crypto assets, there was nothing particularly innovative about his conduct — it was fraud.”
Damian Williams, U.S. Attorney SDNY
Nate Chastain’s guilty verdict comes more than six months after his lawyers filed a motion to get the case dismissed on procedural grounds. He pleaded not guilty as his lawyers argued that OpenSea did not treat the insider knowledge as confidential information during his tenure at the company. “Nobody told Nate that he couldn’t use or share that information,” the former executive’s lawyers stated during the closing arguments earlier this week.