Former OpenSea executive convicted of insider trading by federal jury
Former OpenSea executive Nate Chastain has been found guilty of wire fraud and money laundering in what has been described as the first NFT insider trading case. The U.S. Attorney’s Office for the Southern District of New York charged Chastain in June 2022 for using insider information to purchase NFTs ahead of their listing on OpenSea’s homepage, resulting in a surge in their prices, which he would then sell for a significant profit. The scheme allegedly earned him over $50,000.
The five-day trial ended with Chastain’s conviction after his lawyers and federal prosecutors clashed. Chastain was accused of exploiting his position as the head of product at OpenSea to gain confidential information for personal gain.
His lawyers tried to dismiss the lawsuit, stating that no policies prohibited him from buying NFTs, but prosecutors pointed out his attempts to conceal his actions by using anonymous wallets and accounts. According to the U.S. Attorney for the Southern District of New York, “there was nothing particularly innovative about his conduct – it was fraud.”