- Former OpenSea product manager is looking at 60 years in jail.
- Manhattan Jury says it’s the first-ever NFT insider trading case.
- The defendant chose which NFTs to feature on the homepage.
A former employee of the leading NFT marketplace, OpenSea, is facing serious legal trouble after accusations of money laundering and fraud resulted in a conviction. According to the court documents, Nathaniel Chastain, the man found guilty of these charges, used the insider information he received as OpenSea’s product manager to make a profit.
The leaked court documents suggest that Nate managed to make over $50,000 by simply featuring his own NFTs on the world’s biggest NFT platform, later only to buy these NFTs himself. Further, the Manhattan judge ruling suggests that Nathaniel Chastain might now be heading for an extended stay in prison, from 40 to 60 years.
Prosecutor Says the Defendant Hid on Purpose
The vague crypto regulations in cases like this give some leeway for both sides of the argument. While the defendant’s attorney quickly pointed out that “you can’t hold Nate to a standard that didn’t exist,” the federal prosecutors in Manhattan beg to differ.
During the trial, Prosecutor Allison Nichols explained that Nate Chastain, the former OpenSea product manager, definitely knew what he was doing. “He hid what he was doing,” the prosecutor said, as she pointed out that OpenSea’s confidentiality agreement has been breached, and there’s no way that the company’s product manager wouldn’t know about it.
On The Flipside
- The defendant claims that he simply didn’t know that his information was classified as confidential.
Why You Should Care
Insider and wash trading has been on the rise since 2022. It’s important to establish a regulatory framework to prevent such cases in the future.
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