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June 1, 2022

Ex-OpenSea executive accused of NFT insider trading

Last year, OpenSea claimed it was undertaking an independent investigation into claims of insider trading. As a result of these instances, the platform has taken safeguards to prevent them from happening again.

The first-ever case of digital asset insider trading was brought against an official of the NFT marketplace on Wednesday. The US Department of Justice issued a news statement stating that the defendant allegedly traded on NFT inside information. According to the announcement, the NFTs would be advertised prominently on the OpenSea webpage.

On Wednesday, Chastain was detained in New York City as a result of this. The US District Court for the Southern District of New York is where he will be arraigned, according to the department. 4

Despite the fact that NFTs are relatively new, criminal schemes of this kind are not. It has been claimed that Nathaniel Chastain violated OpenSea by profiting from its exclusive business knowledge. We will not tolerate any kind of insider trading, no matter how little or large, on the stock or blockchain markets.

According to the FBI’s associate director-in-charge, Michael J. Driscoll, Chastain engaged in an age-old practice of insider trading when she was arrested. He conducted the fraud by purchasing hundreds of NFTs before they were listed on the marketplace, taking advantage of his access to sensitive information.

There are individuals who will take advantage of any new financial instrument, such as blockchain-supported non-fungible tokens, for their own benefit. FBI agents are pursuing anyone who attempt to manipulate the market in this manner.

According to the lawyer, the NFTs listed on the NFT platform were hand-picked by Chastain. NFTs that Chastain selected for OpenSea’s webpage were mentioned as part of his job.

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Chastain utilized OpenSea’s sensitive business information from at least June 2021 through at least September 2021.

It was a stealth purchase of hundreds of NFTs before they were posted on the webpage based on knowledge about the upcoming NFTs.