Former Administrator of Largest NFT Platform OpenSea Arrested for 'NFT Fraud and Money Laundering'
NFT technology, which became known to the whole world when it suddenly became a billion-dollar industry in 2021, also hosted many fraud and opportunistic events. Today, with the press release shared by the US Department of Justice , a new one has been added to these fraud events.
The US Department of Justice announced that the former product manager of OpenSea, the largest NFT marketplace, was arrested by the FBI yesterday morning. Former executive named Nate Chastain was charged with fraud and money laundering for using the NFT information within the company for commercial purposes . Chastain used his knowledge of OpenSea and NFTs to personally monetize.
"It was selling NFTs at at least double the profit"
According to the statement shared by the ministry, Chastain was buying these NFTs using internal confidential information about which NFTs to feature on OpenSea, then selling them for multiples of their original value. Moreover, Chastain not only knew which NFTs would be featured, but he could also choose which NFTs would be featured.
Chastain implemented this cunning plan using 7 different anonymous cryptocurrency wallets between June and September of last year . It was determined that Chastain had bought dozens of NFTs and sold them all at a profit of at least double . Upon Chastain's arrest, a statement came from OpenSea:
“As the world's leading web3 marketplace for NFTs, trust and integrity are at the core of everything we do. When we learned of Nate's behavior, we launched an investigation and eventually asked him to leave the company. His behavior violated our employment policies and directly contradicted our core values and principles."
OpenSea fired anonymously
Last
September, OpenSea issued a statement banning its team members from
buying and selling items from featured collections on the site and using
confidential information for NFT trading. In a statement shared by the founder of the platform, Devin Finzer, “We
learned yesterday that one of our employees purchased digital assets
that they knew would hit the homepage before they were even released to
the public.” he said. It has become clear today that the person in question in this statement is Nate Chastain .