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

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

US Arrests Ex-Employee of Opensea NFT Marketplace in 'First-Ever Digital Asset Insider Trading Scheme'

The U.S. Department of Justice (DOJ) has indicted an worker of non-fungible token (NFT) market Opensea in what the division known as the “first-ever digital asset insider buying and selling scheme.”

DOJ Indicts Former Opensea Product Manager

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

The Justice Department defined that from June to September 2021, the defendant allegedly used Opensea’s confidential details about what NFTs have been going to be featured on its homepage “to secretly buy dozens of NFTs shortly earlier than they have been featured.” The DOJ added:

After these NFTs have been featured on Opensea, Chastain offered them at income of two- to five-times his preliminary buy value.

As a part of his employment, Chastain was liable for deciding on NFTs to be featured on Opensea’s homepage. “Opensea stored confidential the id of featured NFTs till they appeared on its homepage,” the DOJ detailed. “After an NFT was featured on Opensea’s homepage, the worth patrons have been keen to pay for that NFT, and for different NFTs made by the identical NFT creator, usually elevated considerably.”

Over the course of his fraudulent scheme, Chastain bought about 45 NFTs on roughly 11 separate events, court docket paperwork present.

U.S. Attorney Damian Williams opined:

Today’s expenses show the dedication of this Office to stamping out insider buying and selling — whether or not it happens on the inventory market or the blockchain.

The DOJ additional detailed: “To conceal the fraud, Chastain carried out these purchases and gross sales utilizing nameless digital foreign money wallets and nameless accounts on Opensea.”

According to the Justice Department:

Chastain, 31, of New York, New York is charged with one rely of wire fraud and one rely of cash laundering, every of which carries a most sentence of 20 years in jail.

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