The fate of Nate Chastain, a former OpenSea product manager, hangs in the balance as jury deliberations begin to determine his guilt in an alleged insider trading scheme. The outcome could have significant implications for the non-fungible token (NFT) market and the reputation of the prominent NFT platform.
Chastain was charged in Manhattan in June last year for allegedly making $50,000 in unlawful gains by purchasing NFTs, featuring them on OpenSea’s website, and then selling them at a profit once their value increased.
Anonymous wallets and covert accounts
According to prosecutors, Chastain hid his activities using anonymous digital currency wallets and covert accounts on OpenSea. He allegedly made profits between two and five times the original purchase price of the NFTs.
Chastain’s lawyer, Daniel Filor, contended that the case was not about the legitimacy of his client’s trades but rather whether Chastain intended to defraud OpenSea. Filor added that the trades did not violate any company rules.
OpenSea’s response and updated policies
In September 2021, OpenSea asked Chastain to resign, citing that his trades were in “direct conflict” with the company’s “core values and principles.” OpenSea updated its policies after Chastain was charged.
During the trial’s closing arguments, prosecutor Thomas Burnett accused Chastain of being guided by greed and using anonymous accounts to trade NFTs, suggesting that Chastain knew his actions were suspect.
Despite the charges, some at OpenSea have come to Chastain’s defense. Court documents revealed that CEO Devin Finzer told prosecutors that the case against Chastain was “unfair” and had negatively impacted his mental health.