On August 22, a federal court handed down a sentence in the case against Nathaniel Chastain, an ex-product manager of the NFT marketplace OpenSea. Chastain was found guilty of engaging in insider trading in May 2023. This case is labelled as the first "NFT insider trading".
What happened
In June 2022, the US prosecutor's office filed charges against Nathaniel Chastain, who had worked as a product manager at OpenSea. The investigation identified 11 instances of insider deals involving 45 NFTs, as a result of which the culprit managed to earn $50,000.
Using his official position, Chastain bought NFTs before their public listing on the marketplace and then resold them for a profit during the period between June and September 2021. In a press release, it was stated that "Chastain exploited his advanced knowledge of what NFTs would be featured on OpenSea's homepage for his personal financial gain".
Whatβs now
Nathaniel Chastain was initially facing up to 2 years in prison, but his case at last resulted in the following verdict:
π¨ 3 months of imprisonment followed by 3 months of home detention;
π 3 years of supervised release;
π° a $50,000 fine;
π confiscation of ETH from his wallets.
The sentence was largely commuted due to the fact that this case is the first of its kind. However, as US Attorney Damian Williams stated, "Today's sentence should serve as a warning to other corporate insiders that insider trading, in any marketplace, will not be tolerated".
According to Inner City Press, the defendant must surrender by November 2, 2023. Otherwise, he will be placed on a wanted list. The lawyers are expected to file an appeal before the deadline.
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