According to prosecutors, Nathaniel Chastain allegedly made a profit by using insider information about which NFTs would be showcased on the marketplace.
A former manager at OpenSea, who was accused of engaging in insider trading of NFTs, has been found guilty of wire fraud and money laundering by a federal court in New York on May 3rd, as reported by Reuters.
Prosecutors allege that Nathaniel Chastain, who used to work as a product manager at OpenSea, had the responsibility of selecting the NFTs that would be showcased on the platform's marketplace for non-fungible tokens.
Prosecutors have accused him of engaging in a series of transactions involving the purchase and subsequent resale of NFTs after they gained prominence. According to their claims, he made these decisions regularly. On June 1, he was formally charged with wire fraud and money laundering in relation to these purported activities.
Legal professionals with a focus on cryptocurrency matters have been closely monitoring a trial that commenced on April 24th. The verdict of this case could potentially impact the classification of NFTs as securities, as argued by some legal experts.
In the closing statements of the trial, defense attorney Daniel Filor contended that Chastain should be considered innocent based on the argument that he was unaware of the confidentiality of the information. Filor asserted that there was no explicit communication informing Nate of the need to keep the information confidential, stating, “Nobody told Nate that he couldn't use or share that information."
“He hid what he was doing,” Nichols reportedly told the jury in her rebuttal. “He knew that he had violated OpenSea’s confidentiality agreement.”
This is the first instance where someone has been physically hit for utilizing insider information to conduct transactions involving non-fungible tokens.
In July, Ishan Wahi, a former employee of Coinbase, and his brother Nikhil were accused of engaging in insider trading related to cryptocurrencies. However, in a separate case, Nikhil Wahi pleaded guilty on September 12, acknowledging his involvement in the alleged insider trading activities.
