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The U.S. brings charges of insider NFT trading for the first time

The U.S. brings charges of insider NFT trading for the first time

Former NFT-marketplace OpenSea employee charged with first-ever insider trading scheme involving non-fungible tokens.

According to a press release issued by the U.S. Department of Justice, Nathaniel Chastain, a former OpenSea manager, supposedly used confidential information indicating which NFTs were to be placed on the marketplace to buy those tokens at a low price in order to resell them later.

The defendant was arrested in New York City on June 1, and the case was filed in U.S. District Court. As alleged in the preliminary conclusion, Chastain used inside information concerning which NFTs would be available on the OpenSea trading platform for his personal financial gain.

He was responsible for selecting NFTs to be placed on the OpenSea platform. The company kept this data secret until the tokens appeared on the platform. After the NFT was placed, the price usually increased significantly.

From June to September 2021, Chastain used confidential information to secretly acquire dozens of NFTs shortly before they were offered on the platform. Then, he sold them with a profit of 2-5 times the original purchase price. The defendant used anonymous crypto wallets and anonymous accounts on OpenSea.

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