A federal judge has sentenced former OpenSea product manager Nathaniel Chastain to three months in prison for wire fraud and money laundering related to insider trading on the platform.
In an Aug. 22 announcement from the United States Department of Justice, U.S. Attorney Damian Williams said Chastain had been sentenced to three months in prison, three months of home confinement and three years of supervised release in addition to being ordered to pay a $50,000 fine and forfeit ill-gotten Ether (ETH) from the nonfungible token (NFT) trades. Inner City Press reported he would be required to surrender himself on Nov. 2, with Chastain’s lawyers planning to appeal the decision and request bail.
“Respect for the law and general deterrence militate for punishment,” reportedly said the judge at sentencing. “But [Chastain] is a first time offender. There are mitigating circumstances. He has a potentially promising future.”
OK- near end of sentencing in US v Nate Chastain, described as 1st “NFT insider trading” case. But loss/gain amount is less than $50,000, defense lawyer Miller (who also repped Wahi) says. Judge has taken 5 minute break before announcing sentence. Watch this feed pic.twitter.com/KyeScdCGAP
— Inner City Press (@innercitypress) August 22, 2023
Chastain, accused of using insider information in his position at OpenSea to profit off the trading of NFTs, was convicted by a jury on May 3 of wire fraud and money laundering. In his position as product manager, he had the authority to choose which NFTs would be featured on the OpenSea website. He purchased 45 NFTs prior to them being featured and then resold them.
An Aug. 22 order from Judge Jesse Furman stated the court would consider whether Chastain would be required to forfeit any ETH from the insider trading scheme or the U.S. dollar equivalent. The sentencing likely marked the conclusion of the case following Chastain being charged and arrested by U.S. authorities in June 2022.
Related: SEC settles case against Wahi brothers for Coinbase insider trading
In a separate case, former Coinbase product manager Ishan Wahi was sentenced to two years in prison in May for using confidential information at the crypto exchange to profit off new token listings. His brother Nikhil and associate Sameer Ramani were also charged in the same case for their involvement in the scheme, with the former pleading guilty in September 2022 and being sentenced to 10 months in prison. At the time of publication, Ramani was still at large.
Magazine: Powers On… Insider trading with crypto is targeted — Finally! Part 1
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Author: Turner Wright