In June 2022, former OpenSea product manager Joshua Chastain was accused of non-fungible token (NFT) insider trading on the NFT marketplace OpenSea. The trial, which concluded on April 24th, resulted in Chastain being found guilty. Legal experts speculated that Chastain’s conviction was largely due to evidence that suggested he had knowledge of the NFTs he bought, giving him an unfair advantage in reselling them.
Defense attorney Daniel Filor argued during closing statements that Chastain was not guilty, as he had limited knowledge of the NFT marketplace, stating: “Chastain had no insider knowledge of what NFTs to buy…he had no clue.” On the other hand, prosecutor Allison Nichols contended that Chastain had intentionally sought to gain an edge, as he had researched the digital collectibles before making the trades, suggesting he was trying to benefit from having insider knowledge. Nichols reportedly told the jury: “It doesn’t matter if other people had knowledge of the same NFTs. It matters that Chastain had access to information that was not available to the public.”
In a separate case, former OpenSea engineer Nikhil Wahi pleaded guilty on September 12th. The conviction of a former OpenSea manager in an NFT insider trading case sets a precedent and highlights the importance of transparency and integrity in the rapidly evolving world of digital assets.
