NFT insider trading scandal: OpenSea executive found guilty
A former product manager at the OpenSea NFT marketplace was found guilty of fraud and money laundering in connection with insider trading on May 3.
Nathaniel Chastain allegedly used inside information about the assets to be displayed on OpenSea’s website to make purchase decisions.
What is known about the case
According to the report, the accused bought non-fungible tokens (NFT) and sold them soon. Which allegedly earned him more than $50,000 in illegal profits. Federal prosecutors in Manhattan described the case as the first insider trading case involving digital assets.
Prosecutor Thomas Burnett was quoted as saying:
“He abused his position at OpenSea to line his own pockets and he lied to cover his tracks.”
According to prosecutor Allison Nichols, Chastain used anonymous OpenSea accounts to carry out the illegal trades. He claimed that his actions showed that Chastain was aware of the wrongness of what he was doing.
According to an OpenSea spokeswoman, the business launched an investigation after becoming aware of Chastain’s alleged behavior and “ultimately asked him to leave.”
NFTs are “not the stock market”
According to an earlier defense argument, the former product manager was not informed that his trading decisions were confidential. While Chastain’s attorney, Daniel Filor, did not dispute the trades, he argued that no one at the company had ever prohibited him from using or disclosing information about which NFTs would be featured on the website.
Of the verdict, Filor said, “However, we disagree with the jury’s verdict and we are considering our options.”
The original allegations were made last year, and Chastain has since denied them.
According to prosecutors, Chastain purchased approximately 45 NFTs. And he sold them for anywhere from two to five times their original price.
The case raises the question of whether existing ones can be used to better regulate the cryptocurrency and NFT markets. Especially now that the US has lagged in oversight and the securities regulator has come under fire for its enforcement.
“It’s not the stock market,” according to Filor.
The five-day trial in the case began last week and ended on Wednesday with a verdict.
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