2023/10/9 11:44 Man jailed for the insider trading of NFTs - in what is believed to be the first case of its

e the first case of its kind | Science & Tech News | Sky News

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Man jailed for the insider trading of

NFTs - in what is believed to be the first
case of its kind
The judge said the punishment was "difficult" to decide, and raised doubts about
whether the case would have reached court if it wasn't in the "slightly sexy" new arena
of crypto.

Connor Sephton
News reporter @ConnorSephton

Tuesday 22 August 2023 23:03, UK

Listen to this article

0:00 / 2:43 1X
Audio created using AI assistance

OpenSea is the world's biggest NFT marketplace. File pic

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2023/10/9 11:44 Man jailed for the insider trading of NFTs - in what is believed to be the first case of its kind | Science & Tech News | Sky News

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A man has been jailed for the insider trading of non-fungible tokens (NFTs)
- in what prosecutors say is the first case of its kind.

Nathaniel Chastain was working as a product manager at OpenSea, which is

the world's biggest marketplace for the crypto collectibles.

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The 33-year-old purchased NFTs that he knew were going to be featured on

the site's homepage, and later sold them for a profit.

WHAT IS AN NFT?
NFTs took the world by storm in 2021 - with everyone from Snoop Dogg to Donald
Trump releasing their own collections.

"Non-fungible" effectively means each piece of artwork is unique, or a small number

of them have been created.

An example of a fungible item is a banknote - if Kate gives Gemma a tenner, Kate

wouldn't care if she later received a different banknote back.

Plane tickets are a good example of something that's non-fungible. While they may
look the same, each one has a different seat number, class and destination. If Kate
gave Gemma a first-class ticket to Sydney, she might be upset if she was given an
economy ticket back.

Mike Winkelmann - a digital artist known as Beeple - smashed records by selling an

NFT for a whopping $69m (£54m).

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2023/10/9 11:44 Man jailed for the insider trading of NFTs - in what is believed to be the first case of its kind | Science & Tech News | Sky News

While prosecutors had wanted Chastain to spend 27 months behind bars, he

was sentenced to three months in prison and 200 hours of community
service.

He'll also have to pay $50,000 (£39,280) and forfeit cryptocurrency worth
$26,000 (£20,420).

The judge said the punishment was "difficult" to decide, and raised doubts
about whether the case would have reached court if it wasn't in the "slightly
sexy" new arena of crypto.

Chastain will remain free on bail until November and is planning to appeal
the verdict.

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His lawyer had requested no prison time given how he had already lost his
job and equity in OpenSea that was worth millions of dollars.

But during the hearing, he said: "I let down the company I was serving and
lost sight of the person I aspired to be."

Read more crypto news:

Sam Bankman-Fried jailed after bail revoked
Amateur rapper pleads guilty to laundering Bitcoin
Crypto project that scans eyeballs investigated
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2023/10/9 11:44 Man jailed for the insider trading of NFTs - in what is believed to be the first case of its kind | Science & Tech News | Sky News

Earlier this year, a former product manager at Coinbase - an exchange used

for buying and selling cryptocurrencies - was also jailed for two years.

Ishan Wahi shared confidential information about the coins that were going
to be listed by the company to his brother and a friend, allowing them to
make $1.5m (£1.17m) profit.

Related Topics

NFTs Cryptocurrencies

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