Ex-OpenSea exec wants NFTs insider trading charges dropped

Aug 23, 2022
Ex-OpenSea exec wants NFTs insider trading charges dropped

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  • The ex-OpenSea product supervisor filed the movement at the US District Court docket for the Southern District of New York. 
  • He says NFTs will not be securities or commodities and thus he can’t be charged with wire fraud.
  • The US Division of Justice indicted Nathaniel Chastain in June.

Nathaniel Chastain, a former product supervisor at NFT market OpenSea has filed a movement to dismiss the Division of Justice’s insider buying and selling case towards him, in response to court docket paperwork.

Within the submitting carried out on Monday, Chastain claims that the case towards him can’t maintain given non-fungible tokens, or NFTs, can’t be deemed as securities or commodities. On this case then, he can’t face the DOJ’s wire fraud costs.

The movement was filed in the US District Court docket for the Southern District of New York.

Carpenter wire fraud concept

As famous, Chastain’s authorized argument for the dismissal of the fees relies on the Carpenter v. United States, 484 US. 19 (1987) – the Carpenter wire fraud concept.

The ex-OpenSea govt’s authorized group notes a fundamental take a look at the necessities for insider buying and selling primarily based on the Carpenter v. United States, highlights the necessity for there to be securities or commodities for one going through wire fraud costs.

His attorneys argued that the federal government’s place on the matter displayed a “flawed understanding of Carpenter [theory].”

In any prosecution beneath a Carpenter wire fraud concept of insider buying and selling, the existence of securities or commodities buying and selling stays an important component of the offense,” the movement reads.

In accordance with Chastain’s authorized group, the entire problem is premised on the truth that “the thing of the Carpenter determination … is just not solely to stop the misappropriation of confidential data in breach of an obligation owed to the supply of that data, however critically, to guard monetary markets.”

The DOJ charged Chastain in June, referring to allegations towards him because the ‘first-ever digital belongings buying and selling scheme.” The accusations acknowledged that the previous OpenSea employees used insider data to commerce on NFTs that had been set to listing on the main market.

The US Securities and Trade Fee (SEC) additionally just lately filed costs towards a former Coinbase worker and two different individuals over insider buying and selling.

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