Why US Charged Former OpenSea PM For Insider Trading
US Department of Justice June 1, filed its first-ever charges for insider trading in Non Fungible Tokens (NFTs).
iexclusivenews reports that this could indicate that the US government is prepared to treat NFTs similarly to traditional financial products.
This online news outlet understands that OpenSea is the most popular platform for trading NFTs. It is like the eBay of NFTs.
According to data from The Block, OpenSea, a peer-to-peer trading platform, and auction site has a 65 % in the NFT space.
On OpenSea, you may find many of the most valuable NFT collections, such as Bored Ape Yacht Club and CryptoPunks, which sell for hundreds of thousands of dollars in cryptocurrency.
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However, exclusive news Nigeria reports that while proponents of cryptocurrency tout Web3 as a decentralized blockchain-based internet.
OpenSea has grown in importance as a centralized NFT center.
So much power, it appears, that NFT collections published on OpenSea’s homepage became the topic of hype-fueled conjecture. With their valuations skyrocketing.
When an OpenSea employee found out that certain NFTs would be shown on the homepage in the future, he bought them in advance. He is now accused of insider trading by the US government.
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iexclusivenews Nigeria reports that federal prosecutors in Manhattan charged Nathaniel Chastain, a former product manager at OpenSea. With “wire fraud and money laundering. In conjunction with a plot to commit insider trading”.
US Attorney Damian Williams in a press statement stated that; “While NFTs are novel, this illegal scheme is not,”
“As claimed, Nathaniel Chastain betrayed OpenSea by profiting from its proprietary business knowledge.” Today’s charges reflect the Office’s commitment to combating insider trading, whether on the stock market or the blockchain.”
iexclusivenews reports that Chastain covertly purchased dozens of NFTs with advance notification of their site placement.
Using anonymous crypto wallets and OpenSea accounts. And then sold them for “two- to five-times his initial purchase price.”
OpenSea spokesman told Quartz; “When we learned of Nate’s actions, we launched an investigation and eventually asked him to leave the company.”
“His actions were in direct contradiction with our basic beliefs and ideals and violated our personnel regulations.”
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iexclusivenews reports that in the crypto realm, it’s not always clear what’s legal and what isn’t.
Cryptocurrencies and other blockchain-based assets are mostly unregulated by governments.
They allow customers to speculate on fresh, highly volatile assets. But they lack the fraud protections that regulated securities provide.
The US Securities and Exchange Commission (SEC), has prosecuted cryptocurrencies as unregistered securities. Or individuals with securities fraud in various circumstances, like the 2019 ICO crackdown.
Meanwhile, iexclusivenews Nigeria reports that in indicting Chastian. The US government stated that it will not only apply securities regulations to crypto-assets but will also use fraud and anti-money laundering laws to combat insider trading.
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