Former OpenSea product manager Nathaniel Chastain has been sentenced by a federal judge to a three-month prison term due to wire fraud and money laundering associated with insider trading on the platform.
According to an announcement from the United States Department of Justice on August 22, U.S. Attorney Damian Williams stated that Chastain has been handed a three-month prison sentence, followed by three months of home confinement, and a three-year period of supervised release. Additionally, Chastain is required to pay a $50,000 fine and forfeit Ether (ETH) obtained through nonfungible token (NFT) trades, which is valued at $1,631 as of the current market value. Inner City Press reported that he is scheduled to surrender himself on November 2, while Chastain’s legal team intends to appeal the ruling and seek bail.
“The judge at sentencing reportedly emphasized the importance of upholding the law and discouraging future wrongdoing. However, considering that [Chastain] is a first-time offender and the presence of mitigating circumstances, he still possesses the potential for a promising future,” the judge’s statement noted.
Chastain, who was accused of leveraging insider knowledge gained from his role at OpenSea to reap profits from NFT trading, was found guilty by a jury on May 3 for wire fraud and money laundering. Holding the position of product manager, he possessed the authority to select NFTs to be showcased on the OpenSea website. He bought 45 NFTs before their display and subsequently resold them for personal gain.
An order issued by Judge Jesse Furman on August 22 indicated that the court would assess whether Chastain should forfeit ETH amassed through the insider trading scheme or its equivalent in U.S. dollars. The sentencing likely marked the conclusion of the case after Chastain’s apprehension and arrest by U.S. authorities in June 2022.
In a separate legal matter, former Coinbase product manager Ishan Wahi was sentenced to two years in prison in May for utilizing confidential information from the cryptocurrency exchange to capitalize on new token listings. His brother Nikhil and associate Sameer Ramani faced charges in the same case for their involvement in the scheme. Nikhil admitted guilt in September 2022 and received a 10-month prison sentence. As of the time of this writing, Ramani was still evading authorities.