Damian Williams, america Lawyer for the Southern District of New York, introduced that NATHANIAL CHASTAIN, a former product supervisor at Ozone Networks, Inc. d/b/a OpenSea (“OpenSea”), was sentenced as we speak to 3 months in jail in reference to a scheme to commit insider buying and selling in Non-Fungible Tokens, or “NFTs,” through the use of confidential details about which NFTs have been going to be featured on OpenSea’s homepage for his private monetary achieve. CHASTAIN was beforehand convicted at trial of wire fraud and cash laundering.
U.S. Lawyer Damian Williams mentioned: “Nathanial Chastain confronted justice as we speak for violating the belief that his employer positioned in him through the use of OpenSea’s confidential data for his personal revenue. Right now’s sentence ought to function a warning to different company insiders that insider buying and selling – in any market – is not going to be tolerated.”
In keeping with courtroom filings and statements made in courtroom:
As a part of his employment, CHASTAIN was accountable for choosing NFTs to be featured on OpenSea’s homepage. OpenSea stored confidential the id of featured NFTs till they appeared on its homepage. After an NFT was featured on OpenSea’s homepage, the worth patrons have been prepared to pay for that NFT, and for different NFTs made by the identical NFT creator, usually elevated considerably. In violation of the duties of belief and confidence he owed to his employer, OpenSea, CHASTAIN exploited his superior information of what NFTs could be featured on OpenSea’s homepage for his private monetary achieve.
From roughly June to September 2021, CHASTAIN used OpenSea’s confidential enterprise details about what NFTs have been going to be featured on its homepage to secretly buy dozens of NFTs shortly earlier than they have been featured. After these NFTs have been featured on OpenSea, CHASTAIN bought them at earnings of two- to five-times his preliminary buy worth. To hide the fraud, CHASTAIN carried out these purchases and gross sales utilizing nameless digital forex wallets and nameless accounts on OpenSea.
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Along with the jail time period, CHASTAIN, 31, of New York, New York, was sentenced to 3 months of dwelling confinement, three years of supervised launch, a $50,000 nice, and ordered to forfeiture the Ethereum he made buying and selling the featured NFTs.
Mr. Williams praised the excellent investigative work of the Federal Bureau of Investigation.
This case is being dealt with by the Workplace’s Securities and Commodities Fraud Process Pressure. Assistant U.S. Attorneys Thomas S. Burnett, Allison Nichols, and Nicolas Roos are in control of the prosecution.
