A former employee at the NFT marketplace OpenSea was ordered to spend three months behind bars after being convicted in the first-ever insider-trading case involving digital assets.
(Bloomberg) — A former employee at the NFT marketplace OpenSea was ordered to spend three months behind bars after being convicted in the first-ever insider-trading case involving digital assets.
Nathaniel Chastain, who used confidential information as head of product at OpenSea to make thousands of dollars, was sentenced Tuesday by US District Judge Jesse M. Furman in New York, after a jury found him guilty in May of wire fraud and money laundering.
Chastain was responsible for choosing which tokens would be featured on OpenSea’s home page, which usually boosted prices. Prosecutors said he bought dozens of NFTs before they were highlighted, and sold them immediately afterwards for as much as five times what he paid, making more than $57,000.
“I am here today because two years ago I let down the community I was serving and lost sight of the person I aspired to be,” Chastain said at the hearing. “I’m sorry for putting my colleagues and friends at OpenSea through this ordeal.”
The case against Chastain could mark a path for prosecutors to crack down on fraud in new and nontraditional markets for digital assets such as cryptocurrencies and NFTs while regulations are still being developed.
Most traditional insider-trading cases, are centered around securities-fraud charges for buying and selling shares based on knowledge of non-public information details. But Chastain was charged with wire fraud – accused of misappropriating confidential business information.
(Adds Chastain statement in fourth paragraph)
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