Nate Chastain, the former head of product at NFT platform OpenSea, has received a three month prison sentence for making tens of thousands of dollars worth of insider trades.
Chastain, 33, was convicted of fraud and money laundering in federal court in New York in May. The conviction marked the end to what prosecutors called the first prominent NFT insider trading case. Chastain reaped more than $50,000 by buying and selling at least 45 NFTs he knew would be featured on OpenSea's homepage, concealing his purchases using various anonymous wallets and OpenSea accounts, according to the U.S. Justice Department.
Inner City Press first reported the sentencing Tuesday.
Chastain's sentence is a fraction of the roughly two year sentence prosecutors, who cited a previous insider trading case at Coinbase, had called for. The case's judge attributed the lenient sentence to Chastain's modest earnings from the trades.
At the time of the crime, the NFT market had reached its zenith, growing to roughly $40 billion.
"Today’s sentence should serve as a warning to other corporate insiders that insider trading – in any marketplace – will not be tolerated, ” U.S. Attorney Damian Williams said in a statement on Monday.
According to the DOJ, Chastain will face another three months of home confinement and three years of supervised release after his prison term.
UPDATE (Aug. 22, 2023, 22:00 UTC): Adds additional sentencing details.
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