Former OpenSea Employee Charged with NFT Insider Trading Scheme

  • The FBI charged Nate Chastain with wire fraud and money laundering.
  • Each of which carries a maximum sentence of 20 years in prison.
  • Chastain was arrested and will be presented in the US District Court for the Southern District of New York today.

Nate Chastain, a former product manager of NFT marketplace OpenSea, was charged by the FBI for the first-ever “Digital Asset Insider Trading Scheme.”

The announcement was made in a press release by a US Attorney for the Southern District of New York Damian Williams and Assistant Director-in-Charge of the New York Field Office of the FBI Michael J. Driscoll. 

In detail, Chastain was charged with one count of wire fraud and one count of money laundering in connection with a scheme to commit NFTs insider trading. Each charge carries a maximum sentence up to 20 years in prison.

For his personal financial gain, he used private information from June 2021 to September 2021 about what NFTs were going to be featured on the homepage of OpenSea and sold them two to five times the initial price. He then concealed the fraud by conducting purchases and sales using anonymous wallets and accounts on OpenSea.

FBI Assistant Director-in-Charge Driscoll emphasized that:

With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain. The FBI will continue to aggressively pursue actors who choose to manipulate the market in this way

Chastain was arrested earlier today in New York and will be presented in the US District Court for the Southern District of New York.

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Bryan is a gamer who became genuinely interested in crypto after his initial exposure to Play-to-Earn games like Axie Infinity and Pegaxy. He has basic knowledge of technical analysis and is keeping an eye out for interesting developments in the metaverse and GameFi space.