NEW YORK, May 3 (Reuters) – A former product manager at non-fungible token (NFT) marketplace OpenSea was convicted on Wednesday of fraud and money laundering for using inside knowledge of which assets would be featured on its home page to trade NFTs.
Nathaniel Chastain was accused of buying NFTs he had decided to feature on the OpenSea website and selling them shortly afterward to make more than $50,000 in illegal profit, in what federal prosecutors in Manhattan described as the first insider trading case involving digital assets.
“Although this case involved trades in novel crypto assets, there was nothing particularly innovative about his conduct – it was fraud,” Damian Williams, the U.S. Attorney in Manhattan, said in a statement.
The charges against Chastain, announced last June, were the first in a series of high-profile cases related to digital assets launched by Williams’ office last year.
The case could have broader implications for assets that do not fit in to existing regulations preventing investment advisers, brokers and others from trading on material nonpublic…