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Former OpenSea exec arrested in first-ever crypto insider trading charge

The Department of Justice says it's the first such case involving digital assets.

Exterior photo of the "Department of Justice" sign mounted on the outside of the building

The DOJ has charged a former OpenSea exec with insider trading.

Photo: Stefani Reynolds/Bloomberg via Getty Images

The Department of Justice has charged Nate Chastain, a former OpenSea executive, with insider trading in a case that could set a precedent for NFTs and other areas of crypto more broadly that have not previously been subject to insider trading enforcement.

Chastain is alleged to have traded on NFTs using confidential business information about which NFTs were to be on OpenSea's home page. Chastain, who was arrested in New York this morning, is charged with wire fraud and money laundering.

As part of Chastain's job, he was responsible for selecting NFTs that were featured on OpenSea's home page. When those NFTs were featured on the site, their prices would rise, the DOJ alleged. The DOJ said it was the first-ever insider trading charge involving digital assets.

From June to September 2021, Chastain used the information to buy dozens of NFTs before they were on OpenSea. He then sold them for two to five times his purchase price.

OpenSea is the largest NFT marketplace and was valued at $13.3 billion in January. OpenSea was also the subject of controversy when it froze the sale of 16 NFTs on its platform that were allegedly stolen.

Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. He was also as a staff writer at Forbes covering social media and venture capital, and edited the Midas List of top tech investors. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

nfts insider trading opensea cryptocurrency
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