Former OpenSea Staff Member Gets Jail Time for NFT Insider Trading
Nathanial Chastain, a former OpenSea employee, has received a three-month prison sentence for his involvement in an insider trading scheme related to non-fungible tokens (NFTs). Chastain was convicted of wire fraud and money laundering after utilizing undisclosed details about upcoming NFTs to benefit himself financially. The US Attorney’s Office for the Southern District of New York provided this information.
In 2021, user X (then Twitter) claimed that Chastain bought NFT drops before the public could get their hands on the digital items. Chastain, who chose which NFTs would appear on OpenSea’s homepage, was accused of selling the tokens he bought in advance for profit after they became widely available and interest in them grew. OpenSea admitted that Chastain had implemented such a plan and said it would prohibit employees from using confidential information to trade NFTs.
The case caught the attention of federal prosecutors, who treated the case like a typical insider trading case. The US Attorney’s Office noted that Chastain sold the NFTs for two to five times the original purchase price.
In addition to her prison sentence, Chastain must serve three months of house arrest and three years of supervised release. He also has to pay a $50,000 fine and forfeit the Ethereum he got from his illegal NFT trade.
“Nathanial Chastain stood trial today for violating the trust placed in him by his employer by using OpenSea’s confidential information for his own benefit,” U.S. Attorney Damian Williams said in a statement. “This verdict should serve as a warning to other corporate insiders that insider trading – in any marketplace – will not be tolerated.”
