US prosecutors have charged a former employee at OpenSea Nathaniel Chastain with insider trading, Reuters reports. Chastain was accused of using confidential information to buy 45 NFTs on 11 separate occasions before they were featured on OpenSea's main page.
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In one of those insider trades, Chastain quadrupled his investments by purchasing a non-fungible token before it was featured on the NFT marketplace. According to prosecutors, Chastain was using this scheme from June to September 2021, when he was responsible for selecting NFTs that would be featured on OpenSea.
"NFTs might be new, but this type of criminal scheme is not. Today's charges demonstrate the commitment of this office to stamping out insider trading — whether it occurs on the stock market or the blockchain," said US Attorney Damian Williams.
Chastain might face up to 40 years in prison as he was charged with wire fraud and money laundering. A spokesperson for OpenSea said that Chastain's behavior was "in violation of our employee policies and in direct conflict with our core values and principles."
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