Published June 1, 20221 min read

The accusations are based on the sale and purchase of digital collectibles in September 2021 on the NFT marketplace

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CoinMooner Team
artwork image for: Former Product Manager for OpenSea is Accused of Insider Trading

A former employee of NFT marketplace charged in first ever digital asset insider trading scheme

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said in a tweet by US Attorney SDNY (U.S. Attorney's Office - Southern District of New York)

Prosecutors assert that Chastain purchased 45 NFTs using anonymous hot wallets and accounts on OpenSea and quickly sold them for profit. Shortly before they were posted on the OpenSea marketplace webpage, he reportedly purchased them and resold them for a profit. As the product manager, he would have the authority to choose which NFTs would be showcased, giving him direct access to the insider knowledge he generated.

The allegation of 11 different deals included the NFT titled "Spectrum of a Ramenfication Theory" on September 14, 2021, which would have been sold the following day for almost four times the purchase price.

U.S. Attorney Damian Williams emphasized his office's determination to investigate insider trading. Chastain was charged with both wire fraud and money laundering. Both offenses carry a potential jail term of twenty years.

OpenSea asserts that it had prior knowledge of Chastain's actions, initiated an inquiry, and asked him to leave when it became evident that he had violated company rules. Soon afterward, Chastain willingly resigned and started working on his project, Oval.

Recently, Coinbase CEO Brian Armstrong addressed similar insider trading charges. The persons implicated may have been Coinbase affiliates or employees. Armstrong would not disclose any disciplinary measures or criminal charges against his workers. Still, he declared that Coinbase would shortly alter its listing procedure to avoid such a situation.

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