- Nathaniel Chastain could decide which NFTs the OpenSea website would feature
- He bought 45 NFTs before they were featured and sold them at a profit
- This is the first judgment in an NFT insider trading case
In the first judgment involving an NFT insider trading case, a federal judge sentenced ex-product manager at NFT platform OpenSea Nathaniel Chastain to three months in prison for money laundering and wire fraud related to insider trading, Cointelegraph wrote, citing a tweet by Inner City Press.
Chastain must surrender on November 2
On Aug. 22, the US Department of Justice announced Chastain had been sentenced to three months of home confinement, three months in prison, and three years of supervised release. He must also pay a $50,000 fine and relinquish ether illicitly obtained from NFT trades.
He has to surrender on Nov. 2. His attorneys intend to lodge an appeal and request bail. Reportedly, presiding Judge Jesse Furman has advocated leniency. While respect for the law mandates punishment, the defendant was a first time offender with a promising future, and there are extenuating circumstances in the case.
The crime: details
Chastain has been accused of using insider information he obtained as an executive at OpenSea to make a profit off NFT trading. A jury convicted him of money laundering and wire fraud on May 3.
As product manager, he could decide which NFTs the OpenSea website would feature. He bought 45 NFTs before they were featured and sold them at a profit after that.
According to an Aug. 22 order from the judge, the court will consider whether the defendant must forfeit any ether or the equivalent in US dollars he gained from the insider trading scheme. Chastain was arrested and charged in June 2022.
Coinbase insider trading case
In related news, former Coinbase product manager Ishan Wahi was sentenced to two years in prison for using classified information to profit off new token listings. His brother Nikhil Wahi was sentenced to pay Coinbase $470,000 for his part in the scheme, as Bankless Times reported at the time.
Associate Sameer Ramani was also charged in the case. He remains at large.
