Nathaniel Chastain, an ex-product manager at OpenSea, has been given a three-month prison term for financial misconduct, including wire fraud and money laundering, linked to insider trading in the NFT marketplace. The U.S. Department of Justice announced on August 22 that he was also sentenced to an additional three months of home confinement, three years of supervised release, and a financial penalty of $50,000. Furthermore, he must relinquish earnings in Ethereum that were acquired illicitly from NFT transactions. Inner City Press reported that Chastain has until November 2 to turn himself in, and his legal team intends to challenge the ruling and seek bail.
During the sentencing, the judge noted Chastain’s status as a first-time offender and indicated that there were extenuating factors in his case. Convicted on May 3 for exploiting inside information to gain from trading NFTs, Chastain had been authorized to select which NFTs would be highlighted on the OpenSea website. He bought 45 NFTs before featuring them and then sold them for a profit. An August 22 judicial order is expected to finalize whether Chastain will have to forfeit either the illicit Ethereum or its equivalent in U.S. dollars.
In a related case, Ishan Wahi, a former product manager at Coinbase, received a two-year prison sentence in May for insider trading at the cryptocurrency exchange. His brother Nikhil and associate Sameer Ramani were also implicated, with Nikhil already admitting guilt and receiving a 10-month sentence. As of the latest update, Ramani remains at large.