A former OpenSea employee has been charged with the first-of-a-kind offense of insider trading in NFTs.
It symbolizes my dedication to preventing both stock market and blockchain-related criminal activity, according to Manhattan Attorney Damian Williams.
OpenSea announced the arrest of 31-year-old Nathaniel Chastain as part of an insider trading conspiracy.
Chastain is accused of buying 45 specific NFTs in secret on 11 separate occasions, according to Reuters. He was suspicious because, while doing so, he had knowledge that the tokens would soon be featured on OpenSea’s front page.
The world’s largest NFT marketplace is OpenSea. The site’s sections are in high demand and are expected to see a surge in interest. As a result, collectors early on gain an unfair trading advantage in anticipation of a price increase.
Chastain is accused of selling such NFTs at two to five times the price he paid for them.
The suspect made a profit of $191,000 by trading the “Spectrum of a Ramenfication Theory” NFT in one transaction on September 14th. The following day, he listed it for sale and sold it the next morning.
Between June and September 2021, he was said to have been active. Chastain controlled what NFTs were featured on the front page at the time.
OpenSea pushed Chastain out of the company just months after he was exposed.
A Twitter user spotted suspicious transactions on OpenSea and forwarded them to us. Experts have repeatedly said that blockchain isn’t a useful criminal tool because it records a complete history of bitcoin transactions.
Chastain has also been indicted for wire fraud and money laundering, which might result in a sentence of up to 20 years.