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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
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.
“Nathanial Chastain exploited his advanced knowledge of which NFTs would be featured on OpenSea’s website to make profitable trades for himself,” U.S. Attorney Damian Williams said in a statement. “Although this case involved novel trades in crypto assets, there was nothing particularly innovative about his conduct – it was fraud.”
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.
UPDATE (May 3, 2023 21:32 UTC): Adds comment from Damian Williams.
Edited by Nikhilesh De.
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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
