OpenSea Insider Trading Scandal Sees Former Manager Jailed for Three Months
Former OpenSea manager Nathaniel Chastain receives 3-month prison sentence for insider trading; other crypto insiders face similar charges.
Fri, 25 Aug 2023, 08:33 am UTC
Former OpenSea product manager, Nathaniel Chastain, has been sentenced by a U.S. federal judge to a three-month prison term. This comes following his involvement in wire fraud and money laundering related to insider trading activities on the NFT platform.
The United States Department of Justice released the announcement on August 22. U.S. Attorney Damian Williams detailed that Chastain would not only serve prison time but would also face three months of home confinement. Following this, he would be under supervised release for three years. Additionally, Chastain has been slapped with a $50,000 fine and the mandate to relinquish the proceeds from his illicit nonfungible token (NFT) transactions in Ether (ETH). Reports from Inner City Press suggest Chastain will begin his sentence come November 2. However, Chastain's legal representation is gearing up to challenge the verdict and seek bail.
The judge, during the sentencing, acknowledged Chastain's clean prior record and the potential in his future but emphasized that breaking the law requires consequences.
Earlier in May, a jury found Chastain guilty. The conviction revolved around Chastain's exploitation of confidential data during his tenure at OpenSea. His role as a product manager granted him the power to determine which NFTs got the spotlight on OpenSea's website. Leveraging this position, he bought 45 NFTs before their official feature and subsequently profited by reselling them.
Judge Jesse Furman, on August 22, revealed that the court was deliberating on the amount of ETH Chastain would need to give up or its equivalent in U.S. dollars, based on his insider trading. This sentencing is believed to wrap up the case, which saw Chastain arrested in June 2022.
In a case mirroring Chastain's, Ishan Wahi, a former product manager at Coinbase, was jailed for two years in May. Wahi's sentence stemmed from his misuse of private data from the crypto exchange to gain profits. In this same investigation, Wahi's brother, Nikhil, and an associate, Sameer Ramani, faced charges. Nikhil admitted his guilt in September 2022 and received a 10-month prison sentence, while Ramani remains unfound.
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