An OpenSea employee has exploited the private information of the company for his financial gain. Nathanial Chastain, 31, is now charged with two counts of fraud with the potential of 40 years in prison.
The first insider trading scheme in digital assets.
US Department of Justice charged a former employee of OpenSea with insider trading.
Nathaniel Chastain, 31, had been exploiting private company information for his gain.
But what is insider trading?.
All trades should be conducted with transparent and public information.
So if you exploit the private information of a company you work in, you have committed insider trading.
Of course, if you have reported your trades to authorities, insider trading is considered legal.
Chastain, as the product manager of OpenSea, was responsible for selecting NFTs to be featured on OpenSea’s homepage.
He used to purchase the NFTs at a low price just before featuring them on the homepage.
After the assets were displayed on the homepage, he sold them at up to 5 times the initial price.
Although insider trading is an old scheme in stock markets, it is new in the digital assets market.
Chastain is charged with one count of wire fraud and one count of money laundering.
Potentially he can be sentenced to 40 years in prison.