US authorities accuse former OpenSea manager of insider trading

Former OpenSea product director Nate Chastain was accused of wire fraud.means of communication and money laundering in insider trading on the NFT marketplace.

Chastain was arrested on June 1. He could face up to 40 years in prison.

The case will be heard by the US District Court for the Southern District of New York.

In the indictment of Attorney DamianWilliams and New York FBI Assistant Director Michael J. Driscoll say this is the first ever insider trading scheme involving digital assets.

In September 2021, OpenSea broke laborrelationship with an unnamed employee involved in insider trading. This moment coincided with the departure from the company of Chastain, who was suspected of fraud. The top manager allegedly used information about the placement of tokens on the main page for his own benefit.

According to the indictment, Chastainwas responsible for selecting those NFTs that were placed on the main page. He pre-purchased tokens using anonymous wallets and marketplace accounts.

Between June 2021 and September 2021, the top manager sold these works for two to five times the purchase price.

The allegations have shown that the ban on insider trading approved in traditional markets also applies to digital assets.

“NFTs are new, but such criminal activity is not. We demonstrate the agency's commitment to rooting out insider trading."Williams said.

Representatives of the platform, in an interview with The Block, confirmed that, following the results of the investigation, they offered Chastain to leave the company.

Recall that in September 2021, OpenSea CEO Devin Finser said that the actions of the dismissed employee of the marketplace were erroneously qualified as insider trading.