Jury convicts former OpenSea manager in NFT-insider trading case

The erstwhile OpenSea manager who was accused of insider trading of NFTs has been convicted connected May 3 of ligament fraud and wealth laundering successful a New York national court, according to a study from Reuters.

According to prosecutors, Nathaniel Chastain, a erstwhile Product Manager astatine OpenSea, was successful complaint of choosing which NFTs would beryllium featured connected the website’s non-fungible token (NFT) marketplace.

After making these decisions, helium often purchased these NFTs and past resold them aft they had been featured, prosecutors said. He was charged with ligament fraud and wealth laundering connected June 1 successful transportation with these alleged transactions. 

OpenSea's location leafage displaying featured NFTs. Source: OpenSea

The proceedings began connected April 24 and has been watched intimately by lawyers specializing successful crypto-related issues. Some ineligible experts person argued that the result of the lawsuit whitethorn impact whether NFTs are considered securities.

According to the May 3 report, defence lawyer Daniel Filor argued successful the trial’s closing statements that Chastain wasn’t blameworthy due to the fact that helium had ne'er been told the accusation was expected to beryllium confidential, stating “Nobody told Nate that helium couldn't usage oregon stock that information."

By contrast, prosecuting lawyer Allison Nichols argued that Chastain knew helium was breaking the law. She claimed that helium utilized anonymous OpenSea accounts to marque the trades, implying that helium was acrophobic of being caught.

"He hid what helium was doing," Nichols reportedly told the assemblage successful her rebuttal. "He knew that helium had violated OpenSea's confidentiality agreement."

Related: Crypto exchanges tackle insider trading aft caller convictions

It marks the archetypal clip a idiosyncratic has been slapped for utilizing privileged cognition to commercialized non-fungible tokens (NFTs).

A erstwhile worker of Coinbase, Ishan Wahi, and his member Nikhil were besides charged with insider trading of cryptocurrencies successful a abstracted lawsuit successful July. In that case, Nikhil Wahi pled guilty connected September 12.