Following a week of court-based shenanigans, deliberation and opposing arguments, a jury has given its verdict in the OpenSea insider trading case. As a result, former Product Manager, Nate Chastain, has been formally convicted of participating in wire fraud.
Way back in September 2021, crypto sleuths uncovered a ruse that involved an OpenSea rogue trader flipping NFTs either side of them being featured on the NFT marketplace’s home page. A cunning plan that backfired when the dubious funds were transferred to a wallet containing a CryptoPunk owned by Chastain.
During the case, Chastain’s lawyers argued that the defendant was unaware that his actions represented a violation of his contract. Stating that his employer had never informed him that he was forbidden from using or sharing this sensitive info.
Burner Wallets and Secrecy Indicate an Admission of Guilt
Despite these protestations, the prosecutor focused on the fact that Nate Chastain had used burner wallets to conduct the trades. Arguing that because his actions were shrouded in secrecy, the defendant was fully aware that they constituted a violation of trust. In the end, the jury elected to convict Chastain of the charges, with sentencing to take place at a later date.
Now that the dust has settled, it is unsure what impact the conviction will have on the wider NFT industry. However, many believe that it will set a new precedent and will allow the US government to go ahead with labelling NFTs as securities. Whatever happens next, the Nate Chastain OpenSea insider trading case will remain a pivotal moment in what comes next for NFTs.
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