By Matthew Russell Lee, Patreon Maxwell Book
BBC-Guardian UK - Honduras - ESPN NY Mag
SDNY COURTHOUSE, June 1 – Already there are several civil Non-Fungible Token cases in the U.S. District Court for the Southern District of New York.
On June 1, a criminal sase was unsealed, charging NATHANIEL CHASTAIN, a former product manager at Ozone Networks, Inc. d/b/a OpenSea (“OpenSea”), with wire fraud and money laundering in connection with a scheme to commit insider trading in Non-Fungible Tokens, or “NFTs,” by using confidential information about what NFTs were going to be featured on OpenSea’s homepage for his personal financial gain. CHASTAIN was arrested this morning in New York, New York and will be presented today in the United States District Court for the Southern District of New York."
When he was presented, before U.S. District Court for the Southern District of New York Magistrate Judge Barbara C. Moses, Chastain was allowed to leave after signing a $100,000 bond. He can travel throughout the continental US, but urinanalysis was ordered to test for drugs.
The conditions: " Appearance Bond Entered as to Nathaniel Chastain in amount of $100,000.00. $100,000 PRB COSIGNED BY ONE FINANCIALLY RESPONSIBLE PERSON; TRAVEL LIMITED TO CONTINENTAL U.S, SURRENDER TRAVEL DOCUMENTS AND NO NEW APPLICATIONS; SUPERVISION AS DIRECTED BY PRETRIAL SERVICES; DEFENDANT TO SUBMIT TO URINALYSIS AND IF POSITIVE ADD CONDITION OF DRUG TESTING/TREATMENT. DEFENDANT TO HAVE NO CONTACT WITH PRESENT OR FORMER EMPLOYEES OF OPENSEA EXCEPT IN PRESENCE OF COUNSEL. DEFENDANT TO HAVE 48 HOURS (JUNE 3) TO SURRENDER PASSPORT; ONE WEEK (JUNE 8) TO OBTAIN CO-SIGNER SIGNATURE. DEFENDANT TO BE RELEASED ON OWN SIGNATURE WITH REMAINING CONDITION TO BE MET AS ALREADY MENTIONED. (Entered: 06/01/2022)." Inner City Press is covering the case.
The prosecutors say: "CHASTAIN was responsible for selecting NFTs to be featured on OpenSea’s homepage. OpenSea kept confidential the identity of featured NFTs until they appeared on its homepage. After an NFT was featured on OpenSea’s homepage, the price buyers were willing to pay for that NFT, and for other NFTs made by the same NFT creator, typically increased substantially. From at least in or about June 2021 to at least in or about September 2021, CHASTAIN used OpenSea’s confidential business information about what NFTs were going to be featured on its homepage to secretly purchase dozens of NFTs shortly before they were featured. After those NFTs were featured on OpenSea, CHASTAIN sold them at profits of two- to five-times his initial purchase price. To conceal the fraud, CHASTAIN conducted these purchases and sales using anonymous digital currency wallets and anonymous accounts on OpenSea."
The case is US v. Chastain, 22-cr-305 (Furman / Moses)
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