Insider trading suspicions have led to the arrest of a former OpenSea employee

Nate Chastain, a former employee of the non-fungible token (NFT) marketplace OpenSea, has been charged with wire fraud and money laundering for allegedly trading NFTs using proprietary information from the site.

According to the DOJ, Chastain, 31, used information about which NFTs were about to be featured on the platform's homepage to increase their exposure and market value.

Chastain is also accused of selling several of these NFTs for two to five times their initial worth, concealing his actions with multiple anonymous wallets and OpenSea accounts.

"While NFTs are new, this type of illegal enterprise is not," U.S. Attorney Damian Williams said. "Today's accusations reflect this office's commitment to combating insider trading, whether it takes place on the stock market or on the blockchain."

Chastain was arrested in New York on Wednesday morning, and each felony carries a maximum sentence of 20 years in prison.

When the claims first surfaced in September of last year, OpenSea launched an investigation and asked Chastain to quit.