OpenSea guilty trading NFTs – On Wednesday, a former product manager at OpenSea, the largest market for non-fungible tokens (NFTs), was found guilty of fraud and money laundering for utilizing insider information to trade NFTs using the assets that would be shown on its front page.
In what federal prosecutors in Manhattan referred to be the first insider trading case involving digital assets, Nathaniel Chastain was accused of purchasing NFTs that he had chosen to feature on the OpenSea website and selling them shortly after to generate more than $50,000 in illicit profit.
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In his closing statement on Monday, the prosecutor, Thomas Burnett, claimed that the defendant
“abused his status at OpenSea to line his own pockets, and he lied to cover his tracks.”
Former OpenSea executive found guilty
The U.S. Attorney’s office in Manhattan brought charges against Chastain in June of last year, marking the beginning of a slew of prominent cases involving digital assets.
According to legal experts, the case may have wider ramifications for assets that do not fall within the current laws prohibiting investment advisers, brokers, and others from trading on important nonpublic information.
Chastain entered a not-guilty plea. When Chastain worked for the business, his attorneys contended that OpenSea did not treat knowledge of which NFTs would be showcased on its home page as confidential information.
“You can’t hold Nate to a standard that didn’t exist,” his attorney Daniel Filor said to the jury during Monday’s final argument. Nate was never informed that he couldn’t utilize or divulge such information.
According to prosecutor Allison Nichols, Chastain made the illicit trades using anonymous OpenSea accounts, demonstrating that he was aware that what he was doing was prohibited.
In her counterargument, Nichols informed the jury that “he concealed what he was doing.” He was aware that he had broken the confidentiality agreement with OpenSea.