Nate Chastain sentenced to three months for insider trading at OpenSea
Date: 2023-08-24 Author: Karina Ziganova Categories: IN WORLD
Nate Chastain, a former OpenSea employee, has been sentenced to three months in prison on charges of insider trading, the U.S. Department of Justice reports Aug. 22.
U.S. Attorney Damian Williams commented:
“Today, Nathanial Chastain appeared in court for breaching a trust placed in him by his employer by using confidential OpenSea information for his own benefit. Today's phrase should serve as a warning... that insider trading... is unacceptable."
In addition to a three-month jail sentence, Chastain will serve three months of house arrest and three years of supervised release.
Chastain will pay an additional $50,000 fine and turn in any Ethereum (ETH) he has earned illegally trading non-fungible tokens (NFTs). Reuters separately reported, based on the latest litigation, that Chastain will hand over $26,000 in ETH.
Reuters also speculated that prosecutors were seeking Chastain to serve a longer prison sentence of 21 to 27 months. Chastain's own lawyers asked that their client receive no jail time because Chastain lost his job and reputation, as well as millions of dollars of shares in OpenSea itself.
This report also indicates that Chastain will remain on bail until November 2, and that Chastain's bail could be extended so that he can appeal. Reuters added that Chastain would serve 200 hours of community service as part of the sentence.
Chastain was an insider trader
The actions for which Chastain was convicted are considered a form of insider trading. Chastain bought NFTs, which he knew would later be featured on the OpenSea home page, and profited from this expertise.
Chastain was involved in this illegal trading activity between June 2021 and September 2021, after which he retired from OpenSea. He was finally convicted of wire fraud and money laundering in May 2023, pending today's verdict.
The case is significant as it is widely considered to be a groundbreaking insider trading case involving non-fungible tokens (NFTs), which marked a major turning point for legal precedents in the digital asset space.
In this regard, prosecutors have drawn parallels with another high-profile case against Ishan Ishan Wahi, a former Coinbase executive. Wahi, who was sentenced to two years in prison for insider trading, traded cryptocurrencies with his brother using privileged knowledge of upcoming Coinbase listings.
