| Chastain
Indicted and Released For Insider Trading
in OpenSea Non Fungible Tokens
By Matthew
Russell Lee, Patreon Maxwell
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BBC-Guardian
UK - Honduras
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NY
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SDNY COURTHOUSE,
June 1 – Already there are
several civil Non-Fungible
Token cases in the U.S.
District Court for the
Southern District of New York.
On June 1, a
criminal sase was unsealed,
charging NATHANIEL CHASTAIN, a
former product manager at
Ozone Networks, Inc. d/b/a
OpenSea (“OpenSea”), with wire
fraud and money laundering in
connection with a scheme to
commit insider trading in
Non-Fungible Tokens, or
“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 this
morning in New York, New York
and will be presented today in
the United States District
Court for the Southern
District of New
York."
When he was
presented, before U.S.
District Court for the
Southern District of New York
Magistrate Judge Barbara C.
Moses, Chastain was allowed to
leave after signing a $100,000
bond. He can travel throughout
the continental US, but
urinanalysis was ordered to
test for drugs.
The conditions:
" Appearance Bond
Entered as to Nathaniel
Chastain in amount of
$100,000.00. $100,000 PRB
COSIGNED BY ONE FINANCIALLY
RESPONSIBLE PERSON; TRAVEL
LIMITED TO CONTINENTAL U.S,
SURRENDER TRAVEL DOCUMENTS AND
NO NEW APPLICATIONS;
SUPERVISION AS DIRECTED BY
PRETRIAL SERVICES; DEFENDANT
TO SUBMIT TO URINALYSIS AND IF
POSITIVE ADD CONDITION OF DRUG
TESTING/TREATMENT. DEFENDANT
TO HAVE NO CONTACT WITH
PRESENT OR FORMER EMPLOYEES OF
OPENSEA EXCEPT IN PRESENCE OF
COUNSEL. DEFENDANT TO HAVE 48
HOURS (JUNE 3) TO SURRENDER
PASSPORT; ONE WEEK (JUNE 8) TO
OBTAIN CO-SIGNER SIGNATURE.
DEFENDANT TO BE RELEASED ON
OWN SIGNATURE WITH REMAINING
CONDITION TO BE MET AS ALREADY
MENTIONED. (Entered:
06/01/2022)." Inner City Press
is covering the
case.
The prosecutors
say: "CHASTAIN was responsible
for selecting NFTs to be
featured on OpenSea’s
homepage. OpenSea kept
confidential the identity of
featured NFTs until they
appeared on its homepage.
After an NFT was featured on
OpenSea’s homepage, the price
buyers were willing to pay for
that NFT, and for other NFTs
made by the same NFT creator,
typically increased
substantially. From at
least in or about June 2021 to
at least in or about September
2021, CHASTAIN used OpenSea’s
confidential business
information about what NFTs
were going to be featured on
its homepage to secretly
purchase dozens of NFTs
shortly before they were
featured. After those NFTs
were featured on OpenSea,
CHASTAIN sold them at profits
of two- to five-times his
initial purchase price. To
conceal the fraud, CHASTAIN
conducted these purchases and
sales using anonymous digital
currency wallets and anonymous
accounts on
OpenSea."
The case is US v.
Chastain, 22-cr-305 (Furman /
Moses)
***
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