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

The U.S. Department of Justice (DOJ) has indicted an employee of non-fungible token (NFT) marketplace Opensea in what the department called the “first-ever digital asset insider trading scheme.”

DOJ Indicts Former Opensea Product Manager

The DOJ announced Wednesday the unsealing of an indictment charging Nathaniel Chastain, a former product manager at Ozone Networks Inc. (aka Opensea), in its “first-ever digital asset insider trading scheme.” Chastain was arrested Wednesday morning in New York.

The Justice Department explained that from June to September 2021, the defendant allegedly used Opensea’s confidential information about what NFTs were going to be featured on its homepage “to secretly purchase dozens of NFTs shortly before they were featured.” The DOJ added:

After those NFTs were featured on Opensea, Chastain sold them at profits of two- to five-times his initial purchase price.

As part of his employment, Chastain was responsible for selecting NFTs to be featured on Opensea’s homepage. “Opensea kept confidential the identity of featured NFTs until they appeared on its homepage,” the DOJ detailed. “After an NFT was featured on Opensea’s homepage, the price buyers were willing to pay for that NFT, and for other NFTs made by the same NFT creator, typically increased substantially.”

Over the course of his fraudulent scheme, Chastain purchased about 45 NFTs on approximately 11 separate occasions, court documents show.

U.S. Attorney Damian Williams opined:

Today’s charges demonstrate the commitment of this Office to stamping out insider trading — whether it occurs on the stock market or the blockchain.

The DOJ further detailed: “To conceal the fraud, Chastain conducted these purchases and sales using anonymous digital currency wallets and anonymous accounts on Opensea.”

According to the Justice Department:

Chastain, 31, of New York, New York is charged with one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison.

What do you think about this case? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.




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Source: https://news.bitcoin.com/us-arrests-former-employee-of-opensea-nft-marketplace-in-first-ever-digital-asset-insider-trading-scheme/