US Arrests Former Employee of Opensea NFT Marketplace in ‘First-Ever Digital Asset Insider Trading Scheme’

The U.S. Department of Justice (DOJ) has indicted an worker of non-fungible token (NFT) marketplace Opensea successful what the section called the “first-ever integer plus insider trading scheme.”

DOJ Indicts Former Opensea Product Manager

The DOJ announced Wednesday the unsealing of an indictment charging Nathaniel Chastain, a erstwhile merchandise manager astatine Ozone Networks Inc. (aka Opensea), successful its “first-ever integer plus insider trading scheme.” Chastain was arrested Wednesday greeting successful New York.

The Justice Department explained that from June to September 2021, the suspect allegedly utilized Opensea’s confidential accusation astir what NFTs were going to beryllium featured connected its homepage “to secretly acquisition dozens of NFTs soon earlier they were featured.” The DOJ added:

After those NFTs were featured connected Opensea, Chastain sold them astatine profits of two- to five-times his archetypal acquisition price.

As portion of his employment, Chastain was liable for selecting NFTs to beryllium featured connected Opensea’s homepage. “Opensea kept confidential the individuality of featured NFTs until they appeared connected its homepage,” the DOJ detailed. “After an NFT was featured connected Opensea’s homepage, the terms buyers were consenting to wage for that NFT, and for different NFTs made by the aforesaid NFT creator, typically accrued substantially.”

Over the people of his fraudulent scheme, Chastain purchased astir 45 NFTs connected astir 11 abstracted occasions, tribunal documents show.

U.S. Attorney Damian Williams opined:

Today’s charges show the committedness of this Office to stamping retired insider trading — whether it occurs connected the banal marketplace oregon the blockchain.

The DOJ further detailed: “To conceal the fraud, Chastain conducted these purchases and income utilizing anonymous integer currency wallets and anonymous accounts connected Opensea.”

According to the Justice Department:

Chastain, 31, of New York, New York is charged with 1 number of ligament fraud and 1 number of wealth laundering, each of which carries a maximum condemnation of 20 years successful prison.

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