NFT Insider Trading: Former OpenSea Executive Charged

On Thursday, 2nd of June, The Department of Justice charged Nate Chastain, formal product manager of OpenSea for money laundering and wired fraud, these came concerning his insider trades of NFT collections.

It was noted that Chastain was taking advantage of the vulnerabilities of the NFT market and making personal gains as he leveraged on the exposures.

It is noted that most actors have chosen to manipulate the market for their personal gain not minding what others might go through. Michael J. Driscoll, the FBI assistant director-in-charge made it clear that a unit has been set to tackle the issues of market manipulations.

It was reviewed that Chastain purchased multiple NFTs before they are being launched or featured on OpenSea. Due to the fact that he is the product manager, he uses his influence to determine which NFT project will launch on the platform. It was gathered that Chastain often approves NFT projects that he has leveraged, in order for him to make a profit after the launch. It was also alleged that Chastain makes gains of 5x through his numerous crypto wallets through this method.

The company prompted a move for resignation for Chastain in September 2021 when his wallets few of his wallets were discovered, an investigation was initiated and he was asked to leave the company. It was noted that the behavior of Chastain was in violation of the company's terms and conditions.

This is not the first time this type of issue is been raised, In April, Coinbase CEO Brian Armstrong instigated new terms and conditions for his company condemning any form of trading for insiders.