Nathaniel Chastain, 31, is charged with insider trading by U.S. prosecutors in Manhattan. Chastain worked as a product manager for OpenSea, the world’s most significant nonfungible token (NFT) exchange. This will be the first time digital assets and traditional criminal investigations have collided.
Nathaniel Chastain asked to leave OpenSea
When it became evident that Chastain had broken company policy, OpenSea claimed to have dealt with it, launched an investigation, and asked him to leave. Instead, Chastain willingly left the project soon after and began work on his own venture, Oval.
Prosecutors allege Chastain purchased 45 NFTs on OpenSea using anonymous hot wallets and anonymous accounts and then sold them for a profit. He allegedly purchased them shortly before the listing on the OpenSea marketplace webpage and promptly sold them.
As the product manager, he can select which NFTs to showcase, providing him direct access to the insider information he created.
Potential 20-year sentence
The claim of 11 separate deals included the NFT titled “Spectrum of a Ramenfication Theory.” He would have sold it nearly four times the buying price the following day.
U.S. Attorney Damian Williams spoke on his office’s commitment to investigating all forms of insider trading. They accused Chastain of money laundering and wire fraud. Both counts carry a maximum sentence of 20 years in jail.
Coinbase CEO Brian Armstrong recently addressed similar charges of insider trading. The people involved could have been Coinbase employees or related to the company. He stated that Coinbase was aiming to alter its listing process in the near future to avoid the situation. Although, Armstrong did not confirm any disciplinary actions or criminal charges against his workers.