Former OpenSea Worker Made ‘Free Cash’ Off NFTs, Says US Prosecutor

A former worker of OpenSea, the world’s largest market for non-fungible tokens (NFTs), used inside information of which property can be featured on its homepage to make “free money,” a prosecutor mentioned on Monday as an insider buying and selling trial wound to an in depth.

The expenses towards Nathaniel Chastain, a former OpenSea product supervisor, had been the primary in a collection of high-profile instances associated to digital property launched by the US Attorney’s workplace in Manhattan final 12 months. Prosecutors have known as it the primary felony insider buying and selling case involving such property.

Prosecutor Thomas Burnett mentioned in his closing argument that Chastain selected which NFTs to characteristic, after which profited illegally by promoting his tokens shortly thereafter. He made upwards of $50,000 (practically Rs. 40 lakh) off such trades earlier than getting caught in September 2021, Burnett mentioned.

“He was using OpenSea’s information like his own piggy bank,” Burnett informed the jury. “It was as good as free money.”

Chastain’s legal professionals had been anticipated to provide their closing argument afterward Monday. They have mentioned that his actions weren’t insider buying and selling, and that the knowledge he accessed was not OpenSea’s property and had no inherent worth to the corporate.

Chastain’s legal professionals have additionally mentioned OpenSea didn’t begin banning staff from shopping for or promoting featured collections or creators till Chastain’s final day, in September 2021. The firm didn’t deal with such info as confidential whereas Chastain labored there, his lawyer David Miller has argued.

Chastain faces one depend of wire fraud and one depend of cash laundering. His trial earlier than US District Judge Jesse Furman in Manhattan started final week.

The case might have broader implications for property that don’t match into present laws stopping funding advisers, brokers and others from buying and selling on materials nonpublic info, authorized consultants have mentioned.

© Thomson Reuters 2023