Nathaniel Chastain, a former head of product at OpenSea, was sentenced to three months in prison and fined $50,000 on Tuesday, according to Inner City Press.
Chastain, 31, was a "first time offender" and had a "potentially promising future," a judge in the U.S. District Court for the Southern District of New York said on Tuesday, according to Inner City Press.
Chastain was convicted in May in what prosecutors called the "first ever digital asset insider trading scheme" following a trial that focused on his alleged NFT insider trading.
"Nathanial Chastain faced justice today for violating the trust that his employer placed in him by using OpenSea’s confidential information for his own profit," said U.S. Attorney Damian Williams, in a statement on Tuesday. "Today’s sentence should serve as a warning to other corporate insiders that insider trading – in any marketplace – will not be tolerated.”
The U.S. attorney's office also said Chastain was sentenced on Tuesday to three months of home confinement and three years of supervised release.
Chastain was charged in June 2022 after he allegedly used confidential information about what NFTs were going to be featured on OpenSea’s homepage to make money for himself. OpenSea is a large online site for buying and selling NFTs.
At OpenSea, Chastain was responsible for confidentially choosing NFTs to be featured on the homepage. After an NFT was then featured on the homepage, the price of those assets typically increased, the Justice Department said last year.
Chastain secretly bought dozens of NFTs shortly before they were featured on the homepage and then sold them at profits of two to five times the original price, the DOJ alleged.
Chastain was asked to resign from his position, OpenSea’s CEO Devin Finzer said in a blog post in September 2022.
Updated to add details throughout
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