The leading NFT marketplace OpenSea's former product manager, Nathaniel Chastain, has been convicted of wire fraud and money laundering in an NFT-related insider trading case.
The court concluded that Chastain used confidential information inside the company about the assets to be listed on the home page to make a profit by trading NFTs.
- Federal prosecutors in Manhattan showed the lawsuit as the first insider trading case involving digital assets.
- According to the accusations in the case, Chastain bought NFTs he had decided to list on OpenSea and sold them in a short while, gaining over $50,000 in illegal profit.
- The U.S. Attorney's office in Manhattan first announced the charges against the former executive in June 2022.
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At the time, Chastain pleaded not guilty, and his lawyers claimed that OpenSea did not classify the knowledge about the NFTs to be listed on the home page as confidential information while he was working at the
company.
- In the closing argument, lawyer Daniel Filor also said Chastain was not informed that he was not authorized to use or share this information.
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On the other hand, prosecutor Allison Nichols revealed that the former executive used anonymous OpenSea accounts while trading NFTs, proving that he knew what he was doing was wrong.
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In April, the crypto exchange Coinbase also won nearly $470,000 of restitution from the brother of its former product manager, Ishan Wahi, in an insider trading case.
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The lawsuit accused Ishan Wahi of informing his brother and an associate about the new cryptocurrencies to be listed on Coinbase before they were publicly announced. They would then buy the cryptocurrencies,
watch their value rise once the listing went public, and then sell them for a profit.
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