Former OpenSea product manager Nate Chastain is facing insider trading charges for allegedly using non-public information to purchase NFT assets featured on the platform, which he then resold for profit. Chastain’s defence argued in court that he was never informed that the information he had access to was confidential, despite his position determining which NFTs would be showcased on the OpenSea homepage. The defence lawyer acknowledged Chastain’s trades, but claimed that he was ignorant of their illegality at the time. The prosecution countered that Chastain used anonymous accounts to carry out these trades, suggesting that he knew the trading was against the rules.
Insider Trading with Digital Assets
The Southern District of New York charged Nate Chastain with insider trading in the summer of 2022, marking the first case of its kind for digital assets. According to court filings, Chastain allegedly entered trades worth around $50,000 for his personal financial gain using insider knowledge. Both wire fraud and money laundering charges were also presented against the former OpenSea employee.
Chastain lodged a counter-motion to have the charges dropped, insisting that NFTs don’t constitute as property, but could not secure bargaining from the court, and the case proceeded as planned. The looming trial is a subject of incredible debate throughout the crypto industry and is perceived to establish a legal precedent that will significantly influence how the sector handles the issue of confidential information within networking platforms.
[h/t Assad Jafri]