- The government claims Chastain unlawfully benefited from the sale of NFTs.
- OpenSea decided to end its partnership with Chastain after learning about the probe.
A former employee of NFT marketplace OpenSea was unable to persuade the court. To dismiss the allegations against him, allowing his trial to go forward. Wire fraud and money laundering charges have been brought against former OpenSea head of product Nate Chastain. The government claims Chastain unlawfully benefited from the sale of NFTs.
Chastain was in charge of selecting the NFTs that would be highlighted on the main page of the trading platform. Moreover, the indictment claims he used this position of power and insider information. To make a profit by buying and selling NFTs before they became popular.
Court Not Convinced by Chastain
Allegedly, Nathaniel Chastain had wallet addresses set up to store the NFTs and remit revenues to himself, according to the prosecution.
After learning of the probe last month, OpenSea decided to end its partnership with Chastain. Additionally, the corporation stated that it has hired an outside firm to “conduct a thorough review of the incident and make recommendations on how we can strengthen our existing controls” in a blog post.
According to the court filing, Chastain had attempted to have the charges dropped by presenting a number of reasons to the judge.
Chastain contended that the information he is accused of stealing is “not ‘property’ within the meaning of the statute,” and so the accusations of wire fraud should be dropped. Further, he said that “the existence of trading in securities or commodities,” which does not already include NFTs, rendered wire fraud impossible.
The NFT market is going through a tough phase with trading volume below expectations. Even the crypto market is undergoing a prolonged winter.
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