A former OpenSea employee has been charged in what the Department of Justice is calling the “first ever” case over a “digital asset insider trading scheme.” In a release on Wednesday, the U.S. Attorney’s Office for the Southern District of New York revealed the unsealing of an indictment that charges former OpenSea product manager Nathaniel Chastain with wire fraud and money laundering in connection with “a scheme to commit insider trading in non-fungible tokens (‘NFTs’) by using confidential information about what NFTs were going to be featured on OpenSea’s homepage for his personal financial gain.” Chastain was arrested in New York on Wednesday.

“This case concerns insider trading in NFTs on OpenSea, the largest online marketplace for the purchase and sale of NFTs,” the U.S. Attorney’s Office asserted in its two-count indictment dated May 31, with U.S. Attorney Damian Williams stating in a corresponding release that “NFTs might be new, but this type of criminal scheme is not.” Chastain “betrayed OpenSea by using its confidential business information to make money for himself,” Williams stated, and “today’s charges demonstrate the commitment of this Office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”

31-year-old Chastain first made headlines last fall when OpenSea confirmed that between June and September 2021, he used internal information to buy the NFTs that were slated to be featured on the homepage of the NFT...

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