The Department of Justice is reportedly targeting “bad actors” in the cryptocurrency community according to The Washington Examiner.
The DOJ will be filing it’s first-ever criminal charges against an alleged digital asset insider trading scheme, according to their press release.
Nathaniel Chastain former product manager with OpenSea, which is a non-fungible token marketplace, is being charged with wire fraud and money laundering
The charges are in relation to allegations that he used nonpublic insider information on what tokens were going to be featured on OpenSea’s front page for his personal financial gain.
Included in the items Chastain reportedly exploited were NFTs, which are digital assets on the blockchain used to represent ownership of artwork, as well as artwork, collectibles, and real-world items.
“NFTs might be new, but this type of criminal scheme is not,” U.S. Attorney Damian Williams said Wednesday.
“As alleged, Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself. Today’s charges demonstrate the commitment of this Office to stamping out insider trading — whether it occurs on the stock market or the blockchain.”
FBI Assistant Director-in-Charge Michael J. Driscoll said that the authorities in this case will “aggressively pursue” anyone who worked to illegally manipulate digital asset markets for personal gain:
“In this case, as alleged, Chastain launched an age-old scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs in advance of them being featured on OpenSea’s homepage,” Driscoll said. “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. The FBI will continue to aggressively pursue actors who choose to manipulate the market in this way.”