US continues trial of former employee of OpenSea NFT platform

Former OpenSea employee Nathaniel Chastain, suspected of insider trading on NFT, failed to convince the judge of his innocence, so the criminal case continues. In June of this year, the Department of Justice charged Chastain with fraud and money laundering during his tenure as the head of the NFT marketplace.

Authorities allege that Chastain used confidential information about which NFT tokens would be featured on the OpenSea homepage to secretly buy up dozens of NFTs just before they were launched. Subsequently, Chastain profited from the sale of digital assets, and used anonymous cryptocurrency wallets and accounts on OpenSea to conceal his actions. According to the Ministry of Justice, Chastain allegedly received at least 19 ETH ($ 25,500 at the time) through the fraudulent scheme.

Chastain’s lawyers also argued that the government could not prove the money laundering charges because the cryptocurrency transactions in question were conducted on the Ethereum blockchain and thus «were fully visible to the public.» In denying the motion to dismiss on October 21, Judge Jesse Fuhrman said that Chastain is not charged with insider trading in the «classic sense of the term «- he is accused of fraud, which does not involve any reference to securities or commodities, but instead involves «obtaining money or property by false or fraudulent pretenses.» Thus, the arguments of the defense lawyers are «completely unfounded».

It is worth reminding that Nathaniel Chastain still faces up to 20 years in prison. It is interesting to note that it was the cryptocurrency Twitter community that discovered the antics of the former OpenSea employee in September last year as a result of a collective investigation. These accusations became the basis for the work of the justice team.