Another fraudster in Web3, who would have guessed? Literally everyone. On Wednesday, an ex-Opensea manager called Nathaniel Chastain was found guilty of fraud and money laundering in an ongoing case. Let’s get into it!
The trial began on April 24th, and many lawyers specializing in crypto-related issues watched it with a keen eye.
And on May 3rd, the former Opensea product manager stood in a trial after profiting from inside information about which NFTs would be featured on the marketplace.
Why does everybody care so much about this case? Well, 3 words. Are NFTs securities? Let me explain.
Some Lawyers and legal case experts argue that the outcome of this case may affect whether NFTs are considered securities in the eyes of the SEC and Gary Gensler…
Because as you probably know, US regulators have kept digital art creators and investors in the dark about which non-fungible tokens (NFTs) could qualify as securities. A situation that must be rectified as soon as possible. Remember the whole NBA top shots deal?
Ex-Opensea Manager Is Guilty
Well, in detail, Chastain was buying the NFTs he would feature on Opensea. And he would then sell them for profit right after they were advertised (aka after their price increases).
Prosecutor Thomas Burnett said the following in his closing argument on Monday: “He knew that when he came up with a plan for what to feature on OpenSea’s website, he was supposed to use that for the company, not for his own gain.” Unfortunately, the Ex-Opensea manager’s greed won out, and he was deemed guilty.
Mind you, Nathaniel Chastain only managed to make $50,000 in profit from his illegal endeavors. And this is mere pennies for a world-leading NFT trading platform such as Opensea.
The final hearing is set for August 22, at which time the court will pronounce its verdict.
Chastine faces up to 20 years in prison.
So, he literally got the very short end of the stick PLUS jail time. Suck to be him…
Initially, Chastain pled not guilty citing that there weren’t any OpenSea rules and regulations that explicitly prevented him from doing what he did.
However, he did use an anonymous account for his illicit affairs, so, he WAS indeed trying to hide his extracurricular activities.
If he really thought what he was doing was fine, he could have just used his regular account. What do you think?
That’s it for today. Stay tuned for more news!