(New York) Nathaniel Chastain, former chief product officer of NFT auction platform OpenSea, has been indicted in an insider trading case, a first in the industry, the United States Department of Justice announced .
Posted at 12:04 p.m.
Mr. Chastain is accused by the FBI of using confidential information to buy dozens of NFTs before they appeared on the front page on OpenSea, for his own financial gain.
He was arrested on Wednesday in New York, but, according to several American media, he was released after posting $100,000 bail.
NFTs are digital objects certified unique and tamper-proof by “blockchain” technology, the market of which exploded in 2021, generating 44.2 billion dollars according to the specialized firm Chainalysis.
These new assets, whose value is difficult to establish and which are traded on deregulated platforms, have a strong speculative dimension.
“Nathaniel Chastain betrayed OpenSea,” prosecutor Damian Williams said in a statement, adding that “NFTs may be new,” but “this type of criminal scheme is not.” On the other hand, it is the first time that an executive in the sector has been brought to justice.
Mr. Chastain was “responsible for the selection of the NFTs displayed on the OpenSea home page”, specified the American Department of Justice, explaining that the NFTs thus put forward saw their price “increase substantially”.
The former OpenSea employee would have taken advantage of this assembly from June to September 2021 and resold the NFTs acquired upstream for “two to five times” their initial price, using anonymous accounts.
On September 16, 2021, the day after the first accusations, OpenSea announced that it had “requested and accepted” the resignation of Mr. Chastain, judging that his “incredibly disappointing” behavior had “violated” the platform’s rules of conduct.
Aged 31, Mr. Chastain faces 20 years in prison for “electronic fraud”, and the same sentence for “money laundering”. He pleaded not guilty.