The U.S. Department of Justice (DOJ) has accused Opensea of an untenable token (NFT) market employee in what the department called the “first scheme for the internal trading of digital assets.”
DOJ accuses former Opensea Product Manager
The DOJ on Wednesday announced the dismissal of an indictment alleging Nathaniel Chastain, a former product manager at Ozone Networks Inc. (aka Opensea), in its “first digital asset for internal trade”. Chastain was arrested Wednesday morning in New York City.
The Justice Department explained that from June to September 2021, the defendant allegedly used Opensea’s confidential information about what NFTs would be presented on its homepage “to secretly purchase dozens of NFTs shortly before they are presented.” The DOJ added:
After these NFTs were introduced on Opensea, Chastain sold them at a profit of two to five times his initial purchase price.
As part of his employment, Chastain was responsible for selecting NFTs to be featured on Opensea’s homepage. “Opensea has kept the identity of prominent NFTs confidential until they appeared on its homepage,” the DOJ detailed. “After NFT was featured on Opensea’s homepage, the price buyers wanted to pay for that NFT, and for other NFTs made by the same NFT creator, it usually increased a lot.”
During his fraudulent scheme, Chastain bought about 45 NFTs on about 11 separate occasions, court documents show.
U.S. Attorney Damian Williams said:
Today’s allegations show the commitment of this Office to eliminate internal trade – whether on the stock exchange or the blockchain.
The DOJ further detailed: “To cover up the fraud, Chastain made these purchases and sales using anonymous digital wallets and anonymous accounts on Opensea.”
According to the Ministry of Justice:
Chastain, 31, of New York, New York is charged with one count of phone fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison.
What do you think of this case? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or support of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use or reliance on any content, goods or services mentioned in this article.