Nate Chastain, the former head of product at NFT platform OpenSea, has been sentenced to three months in prison for making tens of thousands of dollars’ worth of insider trades. Chastain, 33, was convicted of fraud and money laundering in federal court in New York in May, making it the first prominent NFT insider trading case. According to the U.S. Justice Department, Chastain had concealed his purchases of at least 45 NFTs he knew would be featured on OpenSea’s homepage using various anonymous wallets and OpenSea accounts, earning him more than $50,000.
Inner City Press first reported the sentencing Tuesday, which was a fraction of the roughly two-year sentence prosecutors had called for. The judge attributed the lenient sentence to Chastain’s modest earnings from the trades. At the time of the crime, the NFT market had reached its zenith, growing to roughly $40 billion.
Today’s sentence should serve as a warning to other corporate insiders that insider trading – in any marketplace – will not be tolerated, U.S. Attorney Damian Williams said in a statement on Monday.