Former Opensea Employee Sued for using Confidential Information to Purchase NFTs
The former OpenSea employee is accused of purchasing NFTs that were due to be featured and then selling them when their price soared.
On Wednesday, federal prosecutors unveiled the first-ever case of digital asset insider trading, accusing a former NFT marketplace employee of utilizing confidential information to buy NFTs before they were listed on the homepage and their value skyrocketed. Nathanial Chastain, a former product engineer for OpenSea, the largest NFT marketplace, was arrested and charged with wire fraud and money laundering on Wednesday morning.
“NFTs may be new, but this type of criminal conspiracy is not,” said U.S. Attorney Damian Williams of the Southern District of New York on Wednesday. “Today’s accusations demonstrate this Office’s commitment to combating insider trading, whether it takes place on the stock market or on the blockchain.”
An NFT, or Non-Fungible Token, is a non-replicable proof of ownership for a digital asset exchanged on the Ethereum blockchain.
WHAT WAS HE ACCUSED OF
According to the accusation, he bought roughly 45 NFTs anonymously just before they were displayed on OpenSea’s homepage, then sold them for between two and five times their original price when they appreciated in value. Last September, OpenSea admitted that one of its employees had flipped NFTs featured on the homepage using sensitive information.
“We will need to embed trust and transparency into everything we do for a new, more open internet that empowers artists and collectors,” OpenSea co-founder Devin Finzer stated at the time. “We’re determined to doing the right thing for our users and restoring the community’s faith in us.”
The Picture of this Post is one of the pictures purchased by Accused.
WHAT IS NFT AND OPENSEA
Non-Fungible Token, (NFT): is proof of ownership for a digital asset that is traded on the Ethereum blockchain and cannot be replicated.
Opensea platform: The world’s first and largest digital marketplace for crypto collectibles and non-fungible tokens (NFTs). Buy, sell, and discover exclusive digital item.
