San Francisco Frontiers - NFT market sees first insider trading case in US

NYSE - LSE

CMSD	-0.09%	21.98	$
BCC	1.77%	77.84	$
RBGPF	-1.11%	66	$
NGG	-0.09%	82.3	$
CMSC	-0.3%	21.725	$
JRI	1.23%	13.06	$
RIO	-0.32%	91.22	$
BCE	0.42%	21.3	$
RYCEF	-1.05%	18.17	$
RELX	4.5%	34.41	$
GSK	1.19%	51.35	$
BTI	1.84%	60.96	$
VOD	-0.66%	15.15	$
BP	-0.25%	43.82	$
AZN	0.58%	169.26	$

NFT market sees first insider trading case in US

ECONOMY 02.06.2022

NFT market sees first insider trading case in US / Photo: © GETTY IMAGES NORTH AMERICA/AFP

US authorities have charged a former manager at a digital exchange platform with fraud and money laundering, in what they said was the first insider trading case involving non-fungible tokens, or NFTs.

Text size:

Nathaniel Chastain was working as a product manager at New York-based OpenSea last year when he secretly bought dozens of NFTs that were about to be featured on the platform's home page, federal prosecutors said in a statement Wednesday.

Chastain, 31, went on to sell the NFTs for two to five times the initial price after they got star billing at the OpenSea website, the criminal case against him states.

NFTs are tokens linked to digital images, collectable items, avatars in games or objects in the burgeoning virtual world of the metaverse.

"NFTs might be new, but this type of criminal scheme is not," US attorney Damian Williams said in a release. "Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself."

Chastain was arrested in New York on Wednesday on charges of wire fraud and money laundering that each carry a maximum penalty of 20 years in prison, prosecutors said.

US media reported that he was later released on bail after entering a non-guilty plea.

The arrest was touted by prosecutors as the first-ever insider trading bust involving digital assets.

"With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain," FBI assistant director-in-charge Michael Driscoll said in the release.

Part of Chastain's job was to pick NFTs to be featured on OpenSea's homepage, with the choices kept secret because prices typically jumped after they got top billing, the criminal complaint said.

The likes of Paris Hilton, Gwyneth Paltrow and Serena Williams have boasted about owning NFTs and many under-30s have been enticed to gamble for the chance of making a quick profit.

Prices have fallen and the reputation of the industry has been hammered for much of the year.

C.Williams--SFF

Featured

Far-right Australian politician loses appeal in racism case

A popular far-right Australian politician failed on Monday to overturn a racial vilification finding that was handed down after she told a Muslim senator to go back to Pakistan.

Indonesia bank chief quits, adding uncertainty to struggling economy

Indonesia's central bank governor has resigned early, the government said Monday, deepening uncertainty as the country grapples with a weakening currency and other economic woes brought on by the Middle East war.

Vita Hydrokultur Opens £1.5m Series A Round to Scale Plant-Grown Skincare Ingredients

Vita Hydrokultur Group Ltd (VHK), the biotechnology manufacturing platform that develops and manufactures high-value, plant-derived bioactive proteins and botanical active ingredients, has announced the opening of a £1.5m Series A funding round to accelerate commercial scale-up and bring its plant-expressed ingredients to the global beauty and wellness industry.

Chinese chipmaker CXMT soars 500% on debut as AI fuels shortages

China's leading memory chipmaker CXMT became the most valuable company in the mainland after soaring more than 500 percent on its market debut Monday, underscoring how AI demand is boosting the semiconductor sector.