A former product manager at OpenSea was sentenced to three months in prison for insider trading in NFTs. Nathanial Chastain was held guilty of using confidential information about NFTs for personal financial gains. Earlier, Chastain was convicted of wire fraud and money laundering, a statement from United States Attorney’s Office, Southern District of New York, said.
“As part of his employment, CHASTAIN was responsible for selecting NFTs to be featured on OpenSea’s homepage. OpenSea kept confidential the identity of featured NFTs until they appeared on its homepage. After an NFT was featured on OpenSea’s homepage, the price buyers were willing to pay for that NFT, and for other NFTs made by the same NFT creator, typically increased substantially,” the statement said.
In violation of the duties of trust and confidence he owed to his employer, Chastain exploited his advanced knowledge of what NFTs would be featured on OpenSea’s homepage for his personal financial gain, the court ruled.
Between June and September, 2021, Chastain purchases dozens of NFTs just before they were featured on the OpenSea’s homepage. After these NFTs were live on OpenSea, Chastain sold them to make profits of two to five times his initial investment.
Chastain who is 31 years old and come from New York was sentenced to three years in prison, three months in home confinement, $50,000 fine, forefeiture of the ETH he made in insider trading of NFTs, and a three year of supervised release.
