US District Judge Jesse Furman from Manhattan has sentenced a former product manager at OpenSea, 33-year-old Nathaniel Chastain, to three months in jail this week for acquiring NFTs that would soon be featured on the marketplace. Charges against Chastain included fraud and money laundering, in a case that federal prosecutors titled “the first insider trading case” that involved digital assets such as NFTs. A similar sentence was passed previously in the case of former Coinbase trading manager Ishan Wahi for trading confidential information regarding tokens that were about to be listed on the exchange.
This case may well be a starting point for prosecutors to crack down on future fraud cases involving the digital assets market. However, Judge Furman called the sentence a “difficult” one to decide, as it involves and ever-evolving sector that the judge curiously called “slightly sexy”. Chastain was initially responsible for overseeing which tokens would be displayed on OpenSea’s home page. During the hearing, he profusely apologized both to his family and to the OpenSea community. Prosecutors initially called for Chastain’s sentence to be similar in temporal terms to that of Wahi, but the former OpenSea employee received a discounted sentence from Judge Furman who, however, called the sentence “a warning” that insider trading in any marketplace will not be tolerated.
