Former OpenSea employee arrested amid insider trading allegations

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The U.S. Department of Justice (DOJ) has charged Nate Chastain, a former employee of the non-fungible token (NFT) marketplace OpenSea, with wire fraud and money laundering for allegedly using confidential information from the platform to trade NFTs.

See related article: Insider trading scandal rocks world’s biggest NFT platform OpenSea

Fast facts

  • The DOJ alleges Chastain, 31, exploited knowledge regarding which NFTs were soon to feature on the platform’s homepage, thereby increasing their exposure and market value.
  • It is also alleged Chastain then sold many of these NFTs for two to five times their original value, using multiple anonymous wallets and OpenSea accounts to disguise his actions.
  • “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.”
  • Chastain was arrested on Wednesday morning in New York and faces a maximum sentence of 20 years for each charge.
  • OpenSea conducted an investigation into the allegations when they emerged in September last year, and asked Chastain to resign. 

See related article: What is OpenSea and why is everyone talking about it?

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