A top former executive at the highly valued NFT startup OpenSea was arrested Wednesday and charged with wire fraud and money laundering in connection with a scheme to commit insider trading, according to a press release from the U.S. Attorney.
The firing of OpenSea's head of product was covered by the tech site. He was accused of front-running purchases of NFT collections that he knew were about to be featured on the homepage of OpenSea. His actions were discovered by other NFT buyers.
After they determined the allegations were legitimate, OpenSea fired Chastain, though he has continued to be active in the NFT community. New employee rules have been enacted by the startup after it noted that it didn't have specific policies in place for this type of behavior.
OpenSea was valued at $13.3 billion by investors.
NFT kingpin OpenSea lands monster $13.3B valuation in new raise
The Justice Department and the U.S. Attorney's Office have begun getting more active in prosecuting crimes related to digital currency, but the NFT space has largely evaded much action, which made the announcement a bit of a shock to those in the space.
NFTs might be new, but this type of criminal scheme is not. Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself. The press release states that the charges demonstrate the commitment of the Office to stamp out insider trading.
We reached out to OpenSea for comment.
OpenSea admits incident as top exec is accused of trading NFTs on insider information
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