On October 21, 2022, the United States District Court for the Southern District of New York issued an order dismissing the motion to dismiss the “insider trading” charges filed against a former OpenSea employee, and It paved the way for the ministry to proceed with the lawsuit. its enforcement action.
as we previously reportedIn June, the Department of Justice said that Nathan Chastain had “First-ever Digital Asset Insider Trading Scheme”
Chastain prosecutionargued that “confidential business information” he allegedly embezzled to profit from the sale of NFTs was not OpenSea’s “property” within the meaning of the Wire Fraud Act. He claimed he could not prove he was involved in money laundering. Transactions on the Ethereum blockchain are publicFinally, Chastain argued that wire fraud charges based on the “embezzlement theory” were insufficient. These allegations require trading in securities or commodities, and NFT is neither. For this argument, Chastain relied heavily on the Department of Justice’s references to “insider trading.” press release And at the first meeting of his case.
The court has now dismissed Chastain’s allegations. The court found Chastain’s argument to be “somewhat persuasive,” but concluded that it would be for a jury to decide at trial. In dismissing Chastain’s argument, the court reasoned: as pointed out before, the Justice Department did not actually indict him for insider trading as defined in the Securities Act, so the question of whether NFTs are securities is not relevant here. removed the term “insider trading” from the letter and made another move to prevent the government from using it in court. The Court reserved judgment on these matters, noting that the motion has not yet been fully submitted for consideration.
As this case continues to develop (DOJ’s Other NFT-related cases), companies, team leaders, DAOs, and anyone else working for Web3 or dealing with NFTs should comply with the NFT Insider Trading Policy ( Open source policy written with Tim Ferriss).
On October 21, 2022, the United States District Court for the Southern District of New York issued an order dismissing the motion to dismiss the “insider trading” charges filed against a former OpenSea employee, and It paved the way for the ministry to proceed with the lawsuit. its enforcement action.
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