According to Reuters, the former manager of OpenSea who was charged with insider trading of NFTs was found guilty of wire fraud and money laundering on May 3.
According to prosecutors, Nathaniel Chastain, a former product manager at OpenSea, was in charge of choosing which NFTs would be featured on the website’s nonfungible token marketplace.
After making these decisions, he frequently purchased these NFTs and then resold them after they had been featured, prosecutors said. He was charged with wire fraud and money laundering on June 1 in connection with these alleged transactions.
The trial began on April 24 and has been watched closely by lawyers specializing in crypto-related issues. Some legal experts have argued that the outcome of the case may affect whether NFTs are considered securities.
The former OpenSea manager who was accused of insider trading of NFTs was convicted on May 3 of wire fraud and money laundering in a New York federal court, according to Reuters.
According to the report, defense attorney Daniel Filor argued in the trial’s closing statements that Chastain wasn’t guilty because he had never been told the information was supposed to be confidential.
He stated, “Nobody told Nate that he couldn’t use or share that information.”
By contrast, prosecuting attorney Allison Nichols argued that Chastain knew he was breaking the law. She claimed that he used anonymous OpenSea accounts to make the trades, implying that he was afraid of being caught.
“He hid what he was doing. He knew that he had violated OpenSea’s confidentiality agreement,” Nichols reportedly told the jury in her rebuttal.
It marks the first time a person has been slapped for using privileged knowledge to trade nonfungible tokens.