A June 1st press release from the US Attorney’s Office in the Southern District of New York announced that a former OpenSea executive, Nathaniel Chastain, has been charged with wire fraud and money laundering. The charges are “in connection with a scheme to commit insider trading in Non-Fungible Tokens.”
The accusation is that through his position at leading NFT marketplace OpenSea, Chastain had advanced knowledge of which NFT collections would feature on OpenSea’s homepage. Such featured collections tend to increase in value, and Chastain is alleged to have front-run featured collections, buying NFTs before they appeared on the homepage in order to sell later at a profit.
A key quote in the press release, from US Attorney Damian Williams, reads as follows: “NFTs might be new, but this type of criminal scheme is not. As alleged, Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself. Today’s charges demonstrate the commitment of this Office to stamping out insider trading, whether it occurs on the stock market or the blockchain
