Man jailed for the insider trading of NFTs – in what is believed to be the first case of its kind | Science & Tech News
A man has been jailed for the insider trading of non-fungible tokens (NFTs) – in what prosecutors say is the first case of its kind.
Nathaniel Chastain was working as a product manager at OpenSea, which is the world’s biggest marketplace for the crypto collectibles.
The 33-year-old purchased NFTs that he knew were going to be featured on the site’s homepage, and later sold them for a profit.
While prosecutors had wanted Chastain to spend 27 months behind bars, he was sentenced to three months in prison and 200 hours of community service.
He’ll also have to pay $50,000 (£39,280) and forfeit cryptocurrency worth $26,000 (£20,420).
The judge said the punishment was “difficult” to decide, and raised doubts about whether the case would have reached court if it wasn’t in the “slightly sexy” new arena of crypto.
Chastain will remain free on bail until November and is planning to appeal the verdict.
His lawyer had requested no prison time given how he had already lost his job and equity in OpenSea that was worth millions of dollars.
But during the hearing, he said: “I let down the company I was serving and lost sight of the person I aspired to be.”
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Earlier this year, a former product manager at Coinbase – an exchange used for buying and selling cryptocurrencies – was also jailed for two years.
Ishan Wahi shared confidential information about the coins that were going to be listed by the company to his brother and a friend, allowing them to make $1.5m (£1.17m) profit.
