By Sharan Kaur Phillora
Nate Chastain, the OpenSea staffer who quit the NFT marketplace after an insider trading scandal in September 2021, is now in the crosshairs of U.S. authorities.
Here’s what we know:
Nate Chastain, the former head of product at New York-based OpenSea, is accused of buying NFTs soon before the company planned to feature them on its homepage, profiting from their exposure and his company’s apparent endorsement, according to the Justice Department.
Charging documents allege that Chastain laundered at least 45 NFTs in 2021, each time selling them for two to five times what he had just paid for them. His actions were discovered by other NFT buyers who analyzed his transactions on the Ethereum blockchain.
OpenSea soon fired Chastain after they determined the allegations were legitimate, though Chastain has continued to be active in the NFT community, especially on Twitter. The startup has noted that it didn’t have specific policies in place prohibiting this type of behavior beforehand but has since enacted new employee rules.
Chastain was charged Wednesday with wire fraud and money laundering in connection with trading on confidential information about which non-fungible tokens were about to be featured on the OpenSea homepage, the Department of Justice said in a press release. The two charges each carry a maximum sentence of 20 years in prison.
“NFTs might be new, but this type of criminal scheme is not. As alleged, Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself. Today’s charges demonstrate the commitment of this Office to stamping out insider trading — whether it occurs on the stock market or the blockchain,” said U.S. Attorney Damian Williams in the press release.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.