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OpenSea Fraud Trial moves to closing arguments
Jurors have begun deliberating in the fraud case against former OpenSea employee Nate Chastain. Chastain was fired from the NFT market due to allegations of insider trading. What is happening with the investigation against him?
Image credit: TheLedger
What is happening with the OpenSea fraud case?
Nate Chastain, a former product manager for OpenSea and its most public Twitter presence, was a popular NFT personality during the NFT bull market of 2021. He quickly answered other users’ questions on Twitter and developed a reputation for helping to solve problems with the OpenSea NFT platform.
However, in September 2021, Chastain was accused of insider trading. He is said to have spearheaded collections that were to appear on the cover of OpenSea. Chastain did this maneuver by buying them with anonymous wallets before they were featured on the website. After the NFTs appreciated in value from being listed on OpenSea’s website, Chastain sold them for a profit.
Manhattan federal prosecutors charged Chastain in June 2022 with receiving more than $50,000 in illegal profits. The charges against him include one count of wire fraud and one count of insider trading.
Prosecutor Thomas Burnett stated: “He knew that when he came up with a plan for what would appear on OpenSea’s website, he was meant to use it for the company, not for his own gain. His greed won out.”
Image credit: OpenSea
Will Chastain be found guilty?
It is still unclear at this point. Daniel Filor, Chastain’s attorney, said his client did not violate the company’s rules. He stated: “Nate’s choice in his head about which NFT to contain was not considered by OpenSea to be confidential.”
Burnett disagrees. Prosecutors pointed to Chastain’s use of anonymous wallets as evidence of guilt. He argued: “If the defendant thought there was no problem in using inside information to buy NFTs, he could have just used regular accounts. He did it to throw people off his scent.”
Either way, we should find out soon. The case is being followed closely as this decision is sure to have far-reaching implications for laws governing Web3 going forward.
