OpenSea Employee Arrested In The First Ever Insider NFT Trading Scandal

Azuki Collection on OpenSea
Azuki Collection on OpenSea

U.S. prosecutors are now going after insider trading in the crypto industry.

On Wednesday, New York’s Southern District prosecutors charged and arrested Nathaniel Chastain, a former product manager at the online marketplace OpenSea. The 31-year-old faces one count of wire fraud and one count of money laundering, in connection with a scheme to commit insider trading in non-fungible tokens, or NFTs, “using confidential information about what NFTs were going to be featured on OpenSea’s homepage for his personal financial gain.”

Each count carries a maximum sentence of 20 years in prison, the Department of Justice wrote in a press release

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DOJ officials say it is the first time they have pursued an insider trading charge involving digital assets.

“NFTs might be new, but this type of criminal scheme is not,” said U.S. Attorney Damian Williams. “Today’s charges demonstrate the commitment of this Office to stamping out insider trading — whether it occurs on the stock market or the blockchain.”

The FBI’s Assistant Director-in-Charge Michael J. Driscoll says the bureau will continue to aggressively pursue actors who choose to manipulate the market in this way.