NFT market sees first insider trading case in US


The world of digital assets that includes Non-Fungible Tokens such as art used for branding by a California pop-up burger restau
The world of digital assets that includes Non-Fungible Tokens such as art used for branding by a California pop-up burger restaurant.

US authorities have charged a former manager at a digital exchange platform with fraud and money laundering, in what they said was the first insider trading case involving non-fungible tokens, or NFTs.

Nathaniel Chastain was working as a product manager at New York-based OpenSea last year when he secretly bought dozens of NFTs that were about to be featured on the platform’s home page, federal prosecutors said in a statement Wednesday.

Chastain, 31, went on to sell the NFTs for two to five times the initial price after they got star billing at the OpenSea website, the criminal case against him states.

NFTs are tokens linked to digital images, collectable items, avatars in games or objects in the burgeoning virtual world of the metaverse.

“NFTs might be new, but this type of criminal scheme is not,” US attorney Damian Williams said in a release. “Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself.”

Chastain was arrested in New York on Wednesday on charges of wire fraud and money laundering that each carry a maximum penalty of 20 years in prison, prosecutors said.

US media reported that he was later released on bail after entering a non-guilty plea.

The arrest was touted by prosecutors as the first-ever insider trading bust involving digital assets.

“With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain,” FBI assistant director-in-charge Michael Driscoll said in the release.

Part of Chastain’s job was to pick NFTs to be featured on OpenSea’s homepage, with the choices kept secret because prices typically jumped after they got top billing, the criminal complaint said.

The likes of Paris Hilton, Gwyneth Paltrow and Serena Williams have boasted about owning NFTs and many under-30s have been enticed to gamble for the chance of making a quick profit.

Prices have fallen and the reputation of the industry has been hammered for much of the year.


‘Enormously risky’: How NFTs lost their lustre


© 2022 AFP

Citation:
NFT market sees first insider trading case in US (2022, June 2)
retrieved 2 June 2022
from https://techxplore.com/news/2022-06-nft-insider-case.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





Credit: Source link

Discover

19,463FansLike
232,230FollowersFollow
77,499FollowersFollow
13,857FollowersFollow
2,920SubscribersSubscribe

Sponsor

spot_imgspot_img

Latest

Revving Exports to US Keeps India in Race to Be Next China

India, believed by many to have the potential to become the next China, is finally making headway in the exports market as it...

Brooklyn Beckham dedicates a new bunny tattoo to his wife’s family

This Tuesday, Brooklyn Beckham got a sentimental new tattoo in honor of Nicola Peltz 's maternal grandmother. An unusual...

P&G Relies on Price Hikes to Prop Up Sales as Volumes Shrink

Procter & Gamble Co. sold fewer household staples than expected last quarter as consumers grew more cautious about higher prices.The total volume of...

Paul Rudd Becomes Hero After Befriending Middle Schooler Being Bullied

Paul Rudd is one of the sweetest people on the planet. He...

This Dermatologist-Loved Retinol Is Finally on Sale

From busting blemishes to ironing out fine lines, retinol is a star player in the world of multitasking skin-care ingredients. Naturally, experts...
en English
X