Former OpenSea former product manager Nate Chastain has been convicted of fraud and money laundering, Reuters said on May 3.
Chastain purchased non-fungible tokens (NFT) that he chose to feature on the OpenSea marketplace and sold those assets a short time later.
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This allowed him to gain $50,000 in illegal profits, according to the report.
Defense lawyers said that Chastain was held to a “standard that didn’t exist” due to OpenSea’s lack of policy around sensitive information. Similar arguments in Chastain’s defense were reported on May 2, as lawyers suggested that Chastain’s decisions about featured NFTs “weren’t considered by OpenSea to be confidential back then.”
However, prosecutor Allison Nichols said that Chastain “abused his status at OpenSea” for profit and said that the fact that he used an anonymous account for trading demonstrated that he knew his actions were wrong.
The incident has been underway since 2021. Chastain stepped down from OpenSea over the incident in September 2021. The Southern District of New York announced charges against Chastain in June 2022, and Chastain’s trial began in January 2023.
The case is the first in the U.S. to involve insider trading of digital assets.
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