The court has charged the former head of the product department of the OpenSea non-fungible token platform (NFT) with fraud using electronic means and money laundering through insider trading.
Nathaniel Chastain was arrested in New York city on Wednesday morning. According to the Department of Justice, he should appear before the U.S. District Court for the Southern District of New York.
Previously, Chastain was accused of using secret Ethereum wallets to purchase NFT based on confidential information, which was subsequently published on the main page of OpenSea. According to the indictment, he was responsible for choosing which NPTs would be posted on the homepage.
It is believed that from about June 2021 to September 2021, he sold these tokens at an increased price after publication, two to five times higher than the original one.
His actions were compared to ahead of the curve and insider trading, actions in which a person profits from non-public information. These actions are prohibited in traditional financial markets, but it is not yet clear how these laws can be applied to the NFT space.
Law enforcement agencies are of the opinion that these laws should be applied in the same way:
NFT may be new, but this type of criminal scheme is not,” said U.S. Attorney Damian Williams. Nathaniel Chastain let OpenSea down by using confidential business information to make money for himself.
Today’s allegations demonstrate the Office’s commitment to eradicating insider trading, whether it occurs in the stock market or on the blockchain.
Assistant Acting FBI Director Michael J. Williams. Driscoll said the FBI “will continue to aggressively pursue individuals who choose to manipulate the market in this way.”
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