25.2 C
Los Angeles
Friday, July 1, 2022

OpenSea Former Product Manager Charged With NFT Insider Trading, Says US Attorney

cryptocurrencyOpenSea Former Product Manager Charged With NFT Insider Trading, Says US Attorney


US prosecutors in Manhattan on Wednesday charged a former product manager at OpenSea, the largest online marketplace for non-fungible tokens, with insider trading, the first such case involving digital assets.

Nathaniel Chastain, 31, of Manhattan, was accused of secretly buying 45 NFTs on 11 separate occasions based on confidential information that the tokens, or others by the same creator, would soon be featured on OpenSea’s home page.

Prosecutors said Chastain chose which NFTs to feature, and sold his NFTs shortly after they were featured, typically for two to five times what he paid.

In one instance, Chastain allegedly more than quadrupled his money by purchasing the NFT “Spectrum of a Ramenfication Theory” on September 14, 2021, and selling it early the next morning.

Prosecutors said the scheme ran from June to September 2021, with Chastain transacting through anonymous digital currency wallets and accounts at OpenSea, also known as Ozone Networks.

“NFTs might be new, but this type of criminal scheme is not,” US Attorney Damian Williams in Manhattan said in a statement. “Today’s charges demonstrate the commitment of this office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”

Chastain pleaded not guilty on Wednesday to wire fraud and money laundering charges, each carrying a maximum 20-year prison term, before US Magistrate Judge Barbara Moses in Manhattan. Bond was set at $100,000 (roughly Rs. 80 lakh).

“When all the facts are known, we are confident he will be exonerated,” Chastain’s lawyer David Miller said in an email.

Non-fungible tokens are unique digital assets, reflecting ownership of files such as artwork, other images, videos and text, and recorded on a blockchain.

The NFT market totaled about $40 billion (roughly Rs. 3,10,300 crore) in 2021, and more than $37 billion (roughly Rs. 2,87,000 crore) from January to April 2022 though transaction activity has been stabilizing, according to the blockchain data firm Chainalysis.

“When we learned of Nate’s behavior, we initiated an investigation and ultimately asked him to leave the company,” OpenSea said in a statement about Chastain. “His behavior was in violation of our employee policies and in direct conflict with our core values and principles.”

© Thomson Reuters 2022


Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
 



Source link

Check out our other content

Check out other tags:

Most Popular Articles