Nate Chastain made approximately $50,000 by buying and trading non-fungible tokens with insider knowledge gained from his position at OpenSea.
Nate Chastain, the former head of product at non-fungible token (NFT) platform OpenSea, was convicted of money laundering and wire fraud in a federal court in New York on Wednesday, according to a report from Reuters.
Chastain was forced to resign from his role in September 2021 after allegations of insider trading spread across social media. Chastain was accused of abusing his position – which included selecting NFTs to feature on OpenSea’s homepage – to illegally profit.
Chastain made more than $50,000 from June 2021 to September 2021 by buying NFTs he knew would be featured on the company’s website on the cheap, and then selling them at inflated prices after the increased attention caused prices to jump, prosecutors alleged. Chastain attempted to conceal his purchases by using anonymous wallets and OpenSea accounts.
Prosecutors in the U.S. Southern District Court of New York (SDNY) filed the wire fraud and money laundering charges against Chastain in June 2022. According to SDNY, the case against Chastain was the first insider trading case involving digital assets.
After attempting and failing to get the case dismissed on procedural grounds, Chastain went to trial in Manhattan on April 24. After three days of deliberation, the jury found Chastain guilty on both counts.
Chastain faces a maximum of 40 years in prison.
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