- Former OpenSea employee Nate Chastain has filed a motion to dismiss the Department of Justice’s indictment against him.
- His legal team argues that the insider trading, wire fraud, and money laundering charges cannot apply to Chastain and that the case is the first of its kind.
- Each charge carries a maximum sentence of 20 years in prison.
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Former OpenSea employee Nate Chastain, whom the Department of Justice has charged on counts of insider NFT trading, wire fraud, and money laundering, has filed a motion to dismiss the indictment against him.
The First Case of Its Kind
Nate Chastain is fighting his indictment.
Court documents show that Chastain’s legal representatives have filed a motion to dismiss the charges of insider trading, wire fraud, and money laundering that were laid against the former OpenSea employee in June.
OpenSea is the largest NFT marketplace in the crypto space. According to the Department of Justice, Chastain allegedly used his position at OpenSea to purchase NFTs that were soon to be posted on the company’s website homepage. As these NFTs would subsequently benefit from the increased exposure, Chastain was able to sell them for up to five times his original purchase price.
Chastain’s legal team argues that “insider trading” charges cannot apply to Chastain as the NFTs concerned are not currently considered either securities or commodities by regulators. The wire fraud count, they further argue, must also be dismissed, as the NFTs Chastain selected to buy were not OpenSea’s property. Finally, the legal team believes that the money laundering charge must be dropped on multiple counts, including the fact that the public nature of Ethereum’s ledger “renders it impossible” to conceal transactions.
Should the motion be dismissed, the legal team has asked for grand jury instructions to be disclosed on the basis that the case will be dealing with issues of first impression, meaning that Chastain’s case would be the first of its kind to be brought before a court. Each of the three counts for which Chastain is charged carries a maximum sentence of 20 years in prison.
Chastain isn’t the only employee of a major crypto company to be charged with insider trading and wire fraud. In July, the DOJ arrested former Coinbase employee Ishan Wahi for allegedly using his position to inform two co-conspirators of upcoming new cryptocurrency listings on Coinbase in order to preemptively buy the coins and sell them after listing.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.