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DOJ: NFT Marketplace ex-Employee Charged with Insider Trading

US Department of Justice | June 1, 2022

US Department of justice - DOJ:  NFT Marketplace ex-Employee Charged with Insider TradingA former employee of OpenSea, the world’s largest NFT marketplace, was charged with insider trading in the first-ever such case involving digital assets, U.S. prosecutors in New York said Wednesday.

This case concerns insider trading in NFTs on OpenSea, the largest online marketplace for the purchase and sale of NFTs. In violation of the duties of trust and confidence he owed to his employer, OpenSea, CHASTAIN exploited his advanced knowledge of what NFTs would be featured on OpenSea’s homepage for his personal financial gain.

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Nathaniel Chastain, 31, a former product manager at OpenSea was arrested by the FBI on wire-fraud and money-laundering charges, according to Damian Williams, the U.S. Attorney for the Southern District of New York.

U.S. Attorney Damian Williams said: “NFTs might be new, but this type of criminal scheme is not. As alleged, Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself. Today’s charges demonstrate the commitment of this Office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”

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FBI Assistant Director-in-Charge Michael J. Driscoll said:

In this case, as alleged, Chastain launched an age-old scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs in advance of them being featured on OpenSea’s homepage. With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain. The FBI will continue to aggressively pursue actors who choose to manipulate the market in this way.

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