Former OpenSea product director Nate Chastain has been charged with electronic fraud and money laundering in an insider trading scheme in an NFT market.

Chastain was arrested on 1 June. He could face up to 40 years in prison.

The case will be heard by the US District Court for the Southern District of New York.

In the indictment of Attorney Damian Williams and his Deputy Director FBI It is said to be the first insider trading scheme to use digital assets by Michael J. Driscoll in New York.

In September 2021, OpenSea terminated its employment relationship with an unnamed employee involved in insider trading. This moment coincided with his departure from the Chastain company, which was suspected of fraud. The top manager allegedly used the information about the placement of tokens on the home page for his own benefit.

According to the indictment, Chastain pre-purchased the tokens using anonymous wallets and marketplace accounts.

Between June and September 2021, the senior executive sold these jobs for two to five times the purchase price.

The charges showed that the ban on insider trading approved in traditional markets extended to digital assets.

“NFTs are new, but not this type of criminal activity. We demonstrate the agency’s commitment to rooting out insider trading.”said Williams.

Platform representatives confirmed in an interview with The Block that they offered Chastain to leave the company following the results of the investigation.

Recall that in September 2021, OpenSea CEO Devin Finser said that the actions of the laid-off market worker were mistakenly qualified as insider trading.