Way back in September 2021, Nate Chastain set the NFT world ablaze when he was caught insider trading during his high-flying job at OpenSea. Now, in a completely different blockchain landscape, his trial has begun, and it is expected to establish a precedent for the mostly unregulated industry
Nathaniel Chastain is accused of using confidential information afforded by his position to use burner wallets to snap up dozens of NFTs that he knew were earmarked for the landing page on OpenSea. He then proceeded to feature the NFTs on the marketplace before re-selling them at a profit.
The charges were first brought against Chastain by the Manhattan U.S. Attorney’s office last June. However, in a recent filing dated April 4, prosecutors note that the ex-product manager abused his position of trust. Despite this, Chastain is facing only one count each of wire fraud and money laundering. His trial before U.S. District Judge Jesse Furman is expected to last one to two weeks.
Chastain’s Lawyers Deny Insider Trading Accusations
As expected, his lawyers have denied the accusations, arguing that his actions are in no way insider trading since the information he utilized to make the trades didn’t belong to OpenSea and had no value to the platform.
At a pretrial conference held on April 20, David Miller, one of Chastain’s lawyers, emphasized this point, noting, “We are not talking about securities trading.” He goes on to add that if prosecutors choose to use the term insider trading, then “there is a substantial danger of undue prejudice and confusion among the jury.”
His lawyers also argue that OpenSea had no restrictions barring employees from buying and selling listed collections while Chastain was there. According to Philip Moustakis, a former SEC enforcement lawyer and partner at Seward & Kissel LLP, this case is likely to change the NFT landscape. Depending on how it goes, it could prevent investment advisors, brokers, and others from trading on information that isn’t public.
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Basil is an avid fan of blockchain technology and all its innovations, and he is passionate about sharing this narrative with his audience. He has spent over five years in the crypto space, specializing in research and creating Web3 content for various media outlets around the globe.