Former product manager for OpenSea’s NFT platform, Nathaniel Chastain, has been found guilty of fraud and unlawful gain by using insider information.
The indictment against Nathaniel Chastain, announced last June, was the first in a series of high-profile cases involving insider trading on NFT platforms and digital asset exchanges.
Recall that last August, Chastain and his attorneys asked the courts to consider dropping the prosecution.
Chastain argued that he was innocent and that the insider trading case against him had no legal merit because NFTs are not considered securities or commodities.
In the trial of the former OpenSea manager, however, the jury agreed with the prosecution’s point of view and found Chastain guilty on all counts.
“Chastain used inside information about which NFTs would be featured on the OpenSea website to make lucrative deals for personal enrichment.
Although the case involves new crypto-asset transactions, there was nothing particularly innovative about his behavior – it was just plain fraud,” said Southern District of New York Attorney Damian Williams.
According to legal experts, a conviction against Chastain could have broader implications, such as prosecuting investment advisers, brokers and others who trade in material nonpublic information.
Earlier, a federal court in Manhattan convicted Nikhil Wahi, the brother of former Coinbase exchange product manager Ishan Wahi, in a case involving insider trading of crypto assets on the platform.