Trial Begins In First NFT Insider-Trading Scheme
Nathaniel Chastain, an ex-OpenSea product manager, is slated to go on trial later this week, over a year after he was arrested in New York City for wire fraud. Chastain’s arrest came at the culmination of an FBI investigation into his NFT operations, in which it was alleged that he had secretly purchased NFTs and resold them for two to five times their original value.
Prosecutors believe Chastain exploited OpenSea’s business information to determine which coins would have the highest value and be promoted on the company’s front page, and then used that information to profit.
OpenSea is the largest online marketplace for selling and purchasing NFTs, and Chastain’s lawyers argued in a pretrial conference on Thursday that Chastain’s actions did not fall under insider trading as the information obtained presented no value to OpenSea. Chastain is charged with one count of wire fraud and one count of money laundering. His trial is expected to last one to two weeks and, if convicted, he faces a maximum of 20 years in prison.
(With inputs from Shikha Singh)
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