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CRYPTOCURRENCY

Former NFT marketplace employee charged in the first-ever digital asset insider trading case

Former NFT marketplace employee charged in the first-ever digital asset insider trading case
The Siliconreview
05 August, 2022

An NFT is a proof of ownership for a digital asset traded on the Ethereum blockchain

Federal prosecutors declared the first ever digital asset insider trading case on Wednesday. They accused a former NFT marketplace employee of utilizing confidential information to purchase NFTs before they were featured on the homepage and shot up in value. An NFT, or Non-Fungible Token, is a proof of ownership for a digital asset traded on the Ethereum blockchain, and it cannot be replicated. Nathanial Chastain, a former product engineer, OpenSea, the largest NFT marketplace, was arrested and charged with money laundering and wire fraud. He anonymously bought about 45 NFTs before they were featured on OpenSea's homepage. He then sold them between two and five times the purchasing price after their value increased.

OpenSea last September confirmed that one of its employees had misused confidential information to flip the  NFTs that was featured on the homepage, "For a new, more open internet that empowers creators and collectors, we will need to bake in trust and transparency into all that we do," OpenSea co-founder Devin Finzer wrote at the time.