Former OpenSea product manager charged with insider trading

On Wednesday, U.S. attorneys in Manhattan charged Nathaniel Chastain, 31, with insider trading. Chastain is a former product manager at OpenSea, the largest non-fungible token (NFT) marketplace. It would be the first case of its kind involving digital assets and a traditional criminal investigation.

Ex-Employee of NFT Marketplace Accused of First Digital Asset Insider Trading Scheme

— US Attorney SDNY (@SDNYnews) June 1, 2022

Prosecutors allege that Chastain purchased 45 NFTs through anonymous hot wallets and anonymous accounts on OpenSea, then sold them shortly thereafter for a profit. He allegedly bought them shortly before they appeared on the OpenSea marketplace home page, then immediately sold them for a profit. As a product manager, he has the power to choose which NFTs to list, giving him direct access to insider information on his own creations.

On September 14, 2021, in 11 separate transactions, the NFT known as "Spectrum of a Ramenfication Theory" was sold the next morning for almost four times the purchase price.

US Attorney Damian Williams commented on his office's commitment to follow up on all forms of insider trading. Chastain was charged with money laundering and wire fraud. Both charges carry a maximum penalty of 20 years in prison.

OpenSea claimed to have knowledge of Chastain's activities, launched an investigation and asked Chastain to leave when it became apparent that he violated company policy. Not long after, Chastain voluntarily resigned to work on his own project, Oval.

process to prevent this from happening. Listing plans to amend its Coinbase soon did not confirm any disciplinary or criminal charges against his staff, but he did say that Armstrong or the staff were involved. Although Coinbase has responded to similar insider trading allegations. The individuals involved may have recently been linked to Brian Armstrong CEO of Coinbase,