Ex-OpenSea Employee Receives Sentencing for NFT Insider Trading
A first-of-its-kind case for the sector that the presiding judge admitted was “difficult” to decide.
OpenSea, one of Web3‘s first established NFT trading platforms and leading platforms by volume, has found itself in the spotlight this week. This is due to its decision earlier in the week to stop honoring creator royalties and as a result of an ex-employee involved in an insider trading case receiving his sentence.
The employee in question, Nathaniel Chastain, was once a product manager at the platform and was convicted on charges of fraud and money laundering in the federal court of Manhattan, a first-of-its-kind case for digital assets according to prosecutors. The 33-year-old defendant was found guilty of using his insider knowledge to buy NFT collections just before they would be featured on the platform’s homepage and then sell them shortly after.
Presiding U.S. District Judge Jesse Furman questioned whether the case would have even come to light if it weren’t for taking place in the “slightly sexy” crypto sector. He further expressed that the sentence was a “difficult” one to decide but ultimately sentenced Chastain to three months of home confinement and a required 200 hours of community service. Chastain will also be required to pay a fine of $50,000 USD, the value of the alleged trades at the time they took place.
Based on information gathered from the hearing, the defendant will be free on bail until Nov 2, with his attorney likely to file for an extension along with an appeal.
In what might be seen as a sort of apology, Chastain said “I let down the company I was serving and lost sight of the person I aspired to be.”
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