The defense for former OpenSea employee Nate Chastain, who has been charged with insider trading, told a jury on May 1 that his client was never told the NFT information under his purview was confidential, Reuters reported.
Chastain is a former product manager for OpenSea and was at one point in charge of which NFTs would be featured on the platform’s homepage. He used his position to purchase assets that were going to be featured beforehand and then sold them when their prices rose.
One of Chastain’s lawyers Daniel Filor did not deny that his client conducted the trades. However, he argued that Chastain was unaware that such a trade could be deemed illegal as OpenSea did not consider it to be sensitive business information at the time.
Filor said:
“This isn’t Wall Street merger and acquisition information. Nate’s choices in his head about which NFT to feature weren’t considered by OpenSea to be confidential back then.”
Meanwhile, the prosecution argued that Chastain’s use of anonymous accounts to make the trades shows he was aware he was doing something illegal.
Prosecutor Thomas Burnett told the jury:
“He was using OpenSea’s information like his own piggy bank. It was as good as free money.
First Insider Trading case
The Southern District of New York arrested and charged Chastain in June 2022 with one count each of money laundering and wire fraud over using the information he had at his disposal to make roughly $50,000 in profits for his personal gain.
It is the first insider trading case related to digital assets and is expected to set a far-reaching legal precedent for the crypto industry.
Chastain initially filed a motion to dismiss the case on the basis that NFTs were not property and no money laundering had taken place. However, the court rejected the motion and said its arguments should be heard by a jury despite saying that they had some merit.
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