Former employee of nft marketplace OpenSea arrested for insider trading

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The United States Department of Justice has arrested a former employee of nft marketplace OpenSea. The man is suspected of having traded NFTs with inside information. The former employee bought the NFTs just before they appeared on the OpenSea homepage.

Between June and September 2021, a former OpenSea . employee according to the US Department of Justice used confidential information from the nft marketplace to “secretly buy dozens of nfts just before they were posted on the homepage.” “After those NFTs appeared on OpenSea, he sold them for a profit of two to five times the original purchase price,” the US Department of Justice said on the matter.

According to the ministry, it is the first charge of insider trading in digital assets. The man is charged with wire transfer fraud and money laundering. Each of these offenses carries a maximum prison sentence of 20 years.

The former employee was responsible for selecting NFTs for the OpenSea homepage. According to the US Department of Justice, the value of NFTs generally increased when they appeared on the homepage. Thanks to the foreknowledge of the former employee, he was able to make a profit on the NFTs that he himself placed on the homepage.

According to court documents, he bought a total of about 45 NFTs at 11 different times. He allegedly used anonymous wallets and accounts on OpenSea to disguise his fraudulent actions. Because all NFT transactions appear on a blockchain and are public, the fraud was discovered.

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