Former OpenSea Worker Charged in First NFT Fraud Case

US authorities on Wednesday accused a former employee of Open Seathe largest platform NFT (Non-Fungible Tokens) in the world, of various crimes for alleged use of privileged information, in the first case of its kind with these digital assets.

Nathaniel Chastain, 31, was arrested today in New York on charges of fraud and money laundering for allegedly exploiting confidential company information to enrich himself.

According to prosecutors, between June and September 2021, Chastain bought dozens of NFTs that were to be featured shortly thereafter on the OpenSea website, typically multiplying interest in them and allowing him to sell them for two to five times the price. price he had paid for them.

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To cover up the ruse, the man – who was responsible for choosing which NFTs were promoted – used anonymous accounts in his operations.

“NFTs may be new, but this type of criminal scheme is not. According to the indictment, Nathaniel Chastain betrayed OpenSea by using confidential information to make money for himself,” US Attorney Damian Williams said in a statement.

OpenSea is the industry’s leading NFT buying and selling platform by trading volume. (Photo: OpenSea)

The two charges that are imputed to the suspect have maximum sentences of 20 years in prison, according to the Prosecutor’s Office.

NFTs (Non-Fungible Tokens) can be understood as digital certificates that guarantee ownership of graphics, videos, texts or any other digital object.

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Like cryptocurrencies, are based on a technology called “blockchain” (chain of blocks)a decentralized process that consists of carrying out a transaction through the network using blocks that contain an inviolable “fingerprint” with the transaction data.

Due to their decentralized nature, the products associated with a digital certificate are listed on different platforms through which users can generate their own NFTs and offer them for direct acquisition or auction.

That market has already generated tens of billions of dollars on those platforms, the largest of which is OpenSea.

Source: Elcomercio