A former product manager at the OpenSea NFT marketplace was found guilty of fraud and money laundering in connection with insider trading on May 3.
Nathaniel Chastain allegedly used insider information about the assets that would appear on OpenSea’s home page to make purchase decisions.
What is Known About the Case
According to the report, the accused purchased non-fungible tokens (NFTs) and then sold them soon. Which reportedly earned him more than $50,000 in illicit profit. The federal prosecutors in Manhattan described the case as the first insider trading case involving digital assets.
Prosecutor Thomas Burnett was quoted saying,
“He abused his status at OpenSea to line his own pockets, and he lied to cover his tracks.”
According to prosecutor Allison Nichols, Chastain used anonymous OpenSea accounts to conduct the illicit trades. He argued that his actions demonstrated that Chastain was aware of the wrongness of what he was doing.
According to a spokeswoman for OpenSea, the business launched an investigation after becoming aware of Chastain’s alleged behavior and “ultimately asked him to leave.”
NFTs Are ‘Not the Stock Market’
According to an earlier defense argument, the former product manager was not informed that his trade decisions were confidential. While Chastain’s attorney, Daniel Filor, did not contest the trades, he claimed no one at the company had ever prohibited him from using or disclosing information regarding which NFTs would be featured on the homepage.
On the verdict, Filor said, “We disagree, however, with the jury’s verdict and we are evaluating our options.”
The original charges were brought on last year, and Chastain has denied them ever since.
According to the prosecution, Chastain bought roughly 45 NFTs. And he sold them for anywhere from two to five times the original cost.
The case raises the issue of whether existing may be used to better regulate the cryptocurrency and NFT markets. Particularly now that the U.S. has lagged in supervision and the securities regulator has come under fire for its enforcement action.
“It’s not the stock market,” according to Filor.
The five-day trial on the case began last week and concluded on Wednesday with a guilty verdict.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
Read More
As the financial landscape continues to evolve, news of an historic case of insider trading involving digital assets makes waves in the industry.
A U.S. District Judge has found Olayemi Akinbode, the former manager of online computer game market OpenSea, guilty of insider trading, marking the country’s first sentence for such activities involving digital assets.
Akinbode accumulated non-public knowledge of OpenSea launching a sister platform called QuickSwap while working as the company’s manager in 2019. He used this confidential information to purchase QuickSwap tokens over the Uniswap cryptocurrency exchange before the official public announcement of its launch.
According to documents obtained by the U.S. Department of Justice, the ex-OpenSea manager made a profit of $85,000 on the digital assets he purchased prior to the announcement. At the time, the tokens were priced between five and eight cents per unit, while they reached up to $1.40 each when the launch of QuickSwap was made public.
The judge presiding over the case ruled that the profits acquired by Akinbode were resulting from unfair trading practices thus constituting securities fraud. The court decided that anyone aware of a company’s movements and using confidential information to trade should be held accountable for his or her actions.
This court ruling marks another step forward in the regulation of digital asset trading. By holding individuals accountable for their actions, this case is expected to encourage transparency in the trading environment and protect investors from deceptive practices.
Overall, the first insider trading case involving digital assets is the latest landmark victory for the Securities and Exchange Commission in the ongoing quest to ensure fair play in the digital asset trading arena.
