Ex-OpenSea exec dodges insider trading charge, wire fraud trial to continue

U.S. Judge Jesse Fuhrman said insider trading accusations against former OpenSea employee Nate Chastain were “misleading” and should be removed from the records, but wire fraud trial continues.

U.S. Department of Justice (DOJ) Paid At the beginning of June, he will be charged with wire fraud and insider trading. Authorities allege that Chastain misused insider information from his OpenSea to trade his NFTs to be posted on the homepage.

In his defense, Chastain said the charges were inappropriate because insider trading laws are not applicable to NFTs. He pointed out that according to Carpenter’s wire fraud theory, insider trading only applies to securities or commodities, not NFTs.

Chastain added that listing information is not confidential business information for OpenSea and is therefore not proprietary. He claimed other employees had access to the information.

Chief Judge Furman said: Court submission Chastain’s argument had “a degree of persuasiveness.” She said the government may not be able to prove money laundering allegations given the transparency of transactions on Ethereum.

Justice Fuhrman added that the government’s use of the term “insider trading” in the Chastain case is misleading because insider trading charges must involve securities or commodities.

The judge said:

“Perhaps the appropriate remedy would be to remove the language from the indictment and prevent the government from using it in court.”

Wire fraud trial continues

Judge Furman, however, refuted Chastain’s contention to dismiss the charges on the following grounds: carpenter wired fraud theory.

Based on Carpenter’s theory, the Wall Street Journal columnist was accused of disclosing trading information to his accomplice. Claimed not to be property of The Wall Street Journal.

However, the Supreme Court has ruled that this information constitutes property within the wire fraud law.

Based on Supreme Court rulings and similar rulings on diversion of information, Judge Furman denied Chastain’s request to dismiss the wire fraud charges.