The Justice Department has charged a former employee of the NFT marketplace with fraud and money laundering in what prosecutors say is the first case involving insider trading in digital tokens. .
An unsealed indictment Wednesday in New York accused Nathaniel Chastain, a 31-year-old former product manager at online marketplace OpenSea, of using inside information to profit on NFTs, or tokens. unsold, featured on his owner’s homepage. Mr. Chastain was arrested Wednesday morning and subsequently pleaded not guilty under his arrangement in a Manhattan federal court. A federal magistrate magistrate set him free for $100,000 and ordered him to turn over his passport and have no contact with current or former OpenSea employees.
“Today’s fees demonstrate this office’s commitment to preventing insider trading — whether it occurs on the stock market or on the blockchain,” U.S. Attorney in Manhattan Damian Williams said in a statement. An announcement.
“When all facts are known, we believe he will be vindicated,” David Miller, Mr. Chastain’s attorney, said in a statement.
Damian Williams, United States Attorney for the Southern District of New York, saw in April. “Today’s fees demonstrate this office’s commitment to preventing insider trading – whether it occurs on the stock market or the blockchain,” he said in a statement Wednesday.
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Mr. Chastain is responsible for selecting the NFTs to be featured on the OpenSea homepage, a large online marketplace to buy and sell NFT, prosecutors said. After an NFT is featured on the homepage, the price a buyer is willing to pay for it often increases, according to prosecutors.
NFT is digital proof for the purchase of goods such as art. Like other digital assets and cryptocurrencies, they are tightly regulated. Aside from some crypto enforcement actions, the Securities and Exchange Commission has not broadly indicated whether most digital assets or NFTs should be regulated securities.
Prosecutors said that between June and September of last year, Mr. Chastain used his secret knowledge of which NFTs would be featured on the homepage to purchase dozens of NFTs before they were introduced. publicly introduced. To conceal his purchases, prosecutors said, he used an anonymous OpenSea account and a digital wallet.
Prosecutors said Mr Chastain bought about 45 NFTs then sold them for two to five times his purchase price.
These include an NFT called “The Spectrum of a Ramenization Theory,” according to the indictment. NFT is the representation of a digital artwork of aliens eating ramen, which according to OpenSea, “a selection of moon meats or vegetables, often topped with a poached pterodactyl egg.”
An OpenSea spokesman said that after learning of Mr Chastain’s alleged conduct, the company initiated an investigation and “ultimately asked him to leave.”
“His conduct violates our employee policy and is in direct conflict with our core values and principles,” a spokesperson said.
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