A former executive at the popular NFT marketplace OpenSea was sentenced to three months in prison in connection with a case revolving around insider trading.
In addition to serving prison time, Nathaniel Chastain, who previously served as a product manager for OpenSea, now must also pay a fine of $50,000 and give up 15.98 ETH, or roughly $26,500.
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Chastain had already been charged with one count of money laundering and one count of wire fraud. He had been accused of purchasing NFTs with the knowledge that they would soon be featured on OpenSea’s homepage. He was convicted on both counts.
The charges had each come with a maximum sentence of 20 years in prison, and according to Reuters, prosecutors had been asking for a greater amount of time behind bars than what Chastain ultimately received.
“I let down the company I was serving and lost sight of the person I aspired to be,” Chastain said during his sentencing.
His case had been closely watched because federal investigators said it was the first of its kind. Never before, authorities said, had there been a case revolving around insider trading, cryptocurrency, and NFTs.
Reuters reported that the judge overseeing the case, US District Judge Jesse Furman, had expressed skepticism over whether an insider trading case revolving around $50,000 worth of assets would have been brought to court were it not for the fact that that the deal occurred in the “slightly sexy” crypto world.
Yet authorities seized on the opportunity as a means to ward off any other future instances of insider trading. US Attorney Damian Williams said that Chastain’s case “should serve as a warning to other corporate insiders that insider trading—in any marketplace—will not be tolerated.”
Chastain’s sentencing comes amid widespread talk that the NFT bubble begun in 2021 has burst. Trading volume has declined significantly, and multiple lawsuits have targeted how certain NFTs are bought and sold.
Source: artnews.com