According to a report from Wednesday, May 3rd, Nathaniel Chastain was recently convicted of insider trading. Chastain is a former product manager at the NFT marketplace OpenSea and used his knowledge of which projects would be featured on the front page to purchase pieces from said collections and later sell them for a significant profit.

Nathaniel Chastain Convicted Of Fraud, Money Laundering, and Insider Trading

This Wednesday, Nathaniel Chastain, OpenSea’s former product manager, was convicted of fraud, money laundering, and insider trading. Chastain allegedly made about $50,000 in profit from his scheme and his case is generally considered to be the first-ever insider trading case involving digital assets. U.S. Attorney Damian Williams, however, commented that despite the fact that the involved assets are novel, the operation itself was not.

Nathaniel Chastain exploited his advanced knowledge of which NFTs would be featured on OpenSea’s website to make profitable trades for himself.  Although this case involved trades in novel crypto assets, there was nothing particularly innovative about his conduct — it was fraud.  A jury has found that Chastain is guilty of using inside information for his own personal gain, and he now faces time in federal prison.

Chastain was originally charged in June 2022. He made a bid to have the case dismissed in August arguing that the charges were based on “ill-founded applications of criminal law.” Chastain’s lawyer’s claim that NFTs can’t be considered “property”—therefore making the indictment invalid—was dismissed by the court in October.

The Case Against Nathaniel Chastain

The accusations against OpenSea’s former product manager first emerged in late 2021. Half a year later, in June 2022, Chastain was arrested and charged with insider trading. According to today’s conviction, he abused his position as product manager to greatly increase personal wealth.

According to the original indictment, Chastain would regularly purchase NFTs from collections he knew would be featured on the marketplace’s front page and then sell them after their price spiked. OpenSea published a statement on the matter in September 2022 and used the opportunity to distance itself from the former product manager.

At the time, the marketplace stated that Chastain was forced out of the company for his wrongdoing, and reaffirmed its commitment to its community. The case is likely to set a precedent as it is, as the DoJ described it, the “first ever digital asset insider trading scheme.” A report from May 2022 stated that cryptocurrency-related insider trading generated more than $1.7 million since February 2021.

This article originally appeared on The Tokenist