The US Department of Justice Wednesday charged Nathaniel Chastain, a former product manager at OpenSea, with insider trading of NFTs in the country’s first-ever case involving digital assets.
OpenSea, the largest online marketplace for non-fungible tokens—with a market share of 65%—accused Chastain of purchasing NFTs before the company featured them on its homepage.
A spokesperson from OpenSea said the company investigated Chastain about the incident “and ultimately asked him to leave the company.”
The charges
The charge documents stated that Chastain bought at least 45 NFTs between June and September 2021 at a lower price and later sold them shortly after they featured on the platform, once their prices had gone up.
He typically sold the NFTs for two to five times the original price.
US Attorney Damian Williams stated, “NFTs might be new, but this type of criminal scheme is not.”
Chastain pleaded not guilty to the accusations that carry a maximum of 20-years in prison.
But, what is insider trading?
Trading stocks—digital assets in this case—based on confidential information (not available to the public) that would affect the stock’s future prices.
