This week, the US courts handed down the verdict for the former OpenSea employee accused of insider trading. In addition to 3 months in prison, what are the other penalties for the person concerned?
Former OpenSea executive to go to jail for insider trading
Nearly 2 years ago, insider trading by Nathanial Chastain, former OpenSea product manager, was spotted by the community thanks to on-chain data. It turned out that Chastain was buying in advance non-fungible tokens (NFTs) that were going to be promoted on the marketplace, with the aim of reselling them later at a profit.
In June 2022, the US courts announced that they were taking up the case, and so began the first trial for insider trading in the Web 3 ecosystem.
This week, the verdict was delivered for Nathanial Chastain, after he was found guilty on 3 May. Chastain received a 3-month prison sentence on charges of wire fraud and money laundering.
Damian Williams, the US Attorney for the Southern District of New York, commented on the court’s decision:
Nathanial Chastain was arraigned today for violating his employer’s trust by using OpenSea’s confidential information for his own benefit. Today’s sentence should serve as a warning to other corporate insiders that insider trading in any market will not be tolerated. “
Home confinement and winnings refund
In addition to the 3 months in prison, other sanctions have been added to Nathanial Chastain’s sentence. Nathanial Chastain has been ordered to serve 3 months of house arrest, in addition to 3 years’ probation and a $50,000 fine.
In addition, the former employee will have to repay the ill-gotten gains from the “dozens of NFTs” concerned, which he is alleged to have resold for 2 to 5 times their original purchase price.
Journalist Matthew Russell Lee has reported that Nathanial Chastain is expected to turn himself in on 2 November to serve his sentence:
Judge: Mr. Chastain is to self-surrender to prison Nov 2, 2023 at 2 pm.
Defense: We request bail pending appeal.
Judge: Put it in writing. Before Nov 2…
– Inner City Press (@innercitypress) August 22, 2023
In addition, the severity of this decision was influenced by a similar case tried in 2017, as well as the fact that the accused had never been in trouble with the law before and had a “potentially bright future”.