Lawyers for ex-OpenSea Executive Nathaniel Chastain filed a motion to dismiss ‘Insider Trading’ charges against him, as per court documents. Chastain is accused of using confidential OpenSea business data to secretly buy NFTs just before they were featured on the company’s homepage.
Following the purchase of the NFTs, Chastain allegedly sold them for a profit. He is also charged with conducting purchases using anonymous OpenSea accounts and digital currency wallets. The company also addressed the incident in a blog post.
In June, Chastain was arrested for insider trading of NFTs and was indicted by a grand jury on wire fraud and money laundering. The Department of Justice described Chastain’s activities as the “first-ever digital insider trading scheme”.
Former SEC lawyer Alma Angotti also expressed her opinion on the case back then, mentioning that this insider trading scandal can open the doors to NFTs being labeled as securities.
On the other hand, the defendant’s lawyers argue in the motion that NFTs are neither securities nor commodities. They also stated that wire fraud cases require trading in securities and commodities.
The point his lawyers put forward was that the government cannot prove whether the specific crypto transaction it cites qualifies as a financial transaction under money laundering rules. Chastain’s lawyers wrote in the motion to dismiss the charges that the government has bought the instant prosecution using ill-founded applications of criminal law to set precedent in the digital space.
Also Read: Reports reveal Coinbase has a Big Insider Trading Problem
