ICYMI: Former head of product for OpenSea indicted after insider trading scandal
A grand jury has indicted the former head of product at non-fungible token platform OpenSea on wire fraud and money laundering charges after an insider trading scandal.
Nathaniel Chastain was arrested Wednesday morning in New York, New York. He is slated for presentation in the US District Court for the Southern District of New York, according to a Wednesday pressof using secret Ethereum wallets to purchase NFTs based on confidential information that they'd soon be featured on OpenSea's home page. He was allegedly responsible for selecting which NFTs would be featured on the homepage, according to the indictment.
The actions were compared to frontrunning and insider trading, activities in which an individual profits off of non-public information. Those activities are prohibited in traditional financial markets, but it was unclear how those laws might apply to the NFT space.“NFTs might be new, but this type of criminal scheme is not," said U.S. Attorney Damian Williams in a statement.
FBI Assistant Director-in-Charge Michael J. Driscoll said the FBI"will continue to aggressively pursue actors who choose to manipulate the market in this way.”Chastain's actions. In response to today's arrest, an OpenSea spokesperson told The Block: "As the world’s leading web3 marketplace for NFTs, trust and integrity are core to everything we do. When we learned of Nate’s behavior, we initiated an investigation and ultimately asked him to leave the company. His behavior was in violation of our employee policies and in direct conflict with our core values and principles."
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