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ARTICLE · 13 NOVEMBER 2022

Case Update: NFT "Insider Trading" Case Allowed To Proceed Against Former OpenSea Employee

Frankfurt Kurnit Klein & Selz PC
Frankfurt Kurnit Klein & Selz PC
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Frankfurt Kurnit Klein & Selz PC

Frankfurt Kurnit Klein & Selz PC

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On October 21, 2022, the United States District Court for the Southern District of New York issued an order denying a former OpenSea employee's motion to dismiss "insider trading"

United StatesTechnology

On October 21, 2022, the United States District Court for the Southern District of New York issued an order denying a former OpenSea employee's motion to dismiss "insider trading" charges brought against him, clearing the way for the U.S. Department of Justice to proceed with its enforcement action.

As we previously reported, in June, the DOJ sent shockwaves through the non-fungible token industry by bringing wire fraud and money laundering charges against Nathan Chastain, claiming that he broke the law by participating in the "first ever digital asset insider trading scheme."

Chastain moved to dismiss the Indictment, arguing that the "confidential business information" he allegedly misappropriated to profit from the purchase and sale of NFTs was not OpenSea's "property" within the meaning of the wire fraud statute. He further argued that the DOJ could not prove that he engaged in money laundering because transactions on the Ethereum blockchain are public.

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This post first appeared in Frankfurt Kurnit's Focus on the Data blog (www.focusonthedata.com). It provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

Originally published by the New York Legal Ethics Reporter

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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