Former OpenSea Employee Made ‘Free Money’ Off NFTs, Says US Prosecutor

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A former worker of OpenSea, the world’s largest market for non-fungible tokens (NFTs), used inside data of which belongings can be featured on its homepage to make “free cash,” a prosecutor mentioned on Monday as an insider buying and selling trial wound up a detailed.

The fees towards Nathaniel Chastain, a former OpenSea product supervisor, have been the primary in a collection of high-profile circumstances associated to digital belongings launched by the US Lawyer’s workplace in Manhattan final 12 months. Prosecutors have known as it the primary prison insider buying and selling case involving such belongings.

Prosecutor Thomas Burnett mentioned in his closing argument that Chastain selected which NFTs to function, after which profited illegally by promoting his tokens shortly thereafter. He made upwards of $50,000 (almost Rs. 40 lakh) off such trades earlier than getting caught in September 2021, Burnett mentioned.

“He was utilizing OpenSea’s data like his personal piggy financial institution,” Burnett informed the jury. “It was nearly as good as free cash.”

Chastain’s attorneys have been anticipated to offer their closing arguments in a while Monday. They’ve mentioned that his actions weren’t insider buying and selling, and that the knowledge he accessed was not OpenSea’s property and had no inherent worth to the corporate.

Chastain’s attorneys have additionally mentioned OpenSea didn’t begin banning staff from shopping for or promoting featured collections or creators till Chastain’s final day, in September 2021. The corporate didn’t deal with such data as confidential whereas Chastain labored there, his lawyer David Miller has argued.

Chastain faces one depend of wire fraud and one depend of cash laundering. His trial earlier than US District Decide Jesse Furman in Manhattan started final week.

The case might have broader implications for belongings that don’t match into present laws stopping funding advisers, brokers and others from buying and selling on materials nonpublic data, authorized specialists have mentioned.

© Thomson Reuters 2023

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