Ex-OpenSea Product Director Nate Chastain has been charged with wire fraud and money laundering in insider trading on the NFT Marketplace.
Chastain was arrested June 1. He could face up to 40 years in prison.
The case will be heard by the U.S. District Court for the Southern District of New York.
The indictment by prosecutor Damian Williams and FBI Assistant Director in New York Michael J. Driscoll said it was the first ever insider trading scheme involving digital assets.
In September 2021, OpenSea terminated the employment relationship of an unnamed employee implicated in insider trading. That timing coincided with the departure of Chastain, who was suspected of fraud. The top executive allegedly used information about the token placement on the homepage for his own benefit.
According to the indictment, Chastain was responsible for selecting those NFTs that were placed on the homepage. He pre-purchased tokens using anonymous wallets and marketplace accounts.
Between June 2021 and September 2021, the top manager sold these works for two to five times the purchase price.
The allegations made showed that the approved insider trading ban in traditional markets applies to digital assets as well.
“NFT is a new phenomenon, but this kind of criminal activity is not. We demonstrate the agency’s commitment to eradicating insider trading,” Williams said.
Platform officials, speaking with The Block, confirmed that they suggested that Chastain leave the company as a result of the investigation.