For the last 2 years, the NFT world has been gripped by the criminal case of Nate Chastain, the outcome of which would have far reaching implications for the industry as a whole. Following 23 Months of accusations, FBI investigations, and court proceedings, the hapless insider trader now faces 3 Months in jail!
Details of Nate’s misdemeanors first came to light in September 2021, when eagle-eyed Twitter dwellers traced dubious transactions to the wallet of the then ‘Head of Content’ at OpenSea. At the time, Mr. Chastain was caught flipping NFTs that he knew would soon feature on the NFT marketplace’s homepage.
The best part of a year later, in June 2022, Nate’s actions came back to haunt him when the FBI came knocking, and formally charged him with insider trading. After which, the judicial system sped into action, where a week-long trial convicted him of insider trading in May 2023.
A Flawed Case with an Inevitable Outcome
In his defense, Nate Chastain’s lawyers argued that he was unaware of any contract or legal infringements when embarking on his campaign of hoodwinkery. However, the fact that he operated in secrecy under a veil of burner wallets and fake accounts said otherwise. In the end, the court convicted Mr. Chastain of using duplicity to obtain approximately $50k through the insider trading of 45 digital assets.
Once the dust had settled, the more sensationalist side of the internet suggested Nate could face up to 20 years in the clink for his crimes. However, prosecutors for the case initially called for a 2-year sentence, citing the wire fraud case of former Coinbase product manager, Ishan Wahi. In the end, the judge went for a more lenient jail term due to the relatively low sums involved, and the epic botch-up reportedly costing Nate millions of dollars in OpenSea shares. However, it remains unclear whether Nate completed his time behind bars in the lead up to the trial and the aftermath.
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