An ex-employee of the NFT MARKETPLACE, OpenSea, has asked a federal court in New York to throw out claims that he did insider trading. He says that prosecutors are “planting a flag in the blockchain business” by stretching the law.
Nathaniel Chastain, a former OpenSea product manager, was charged with wire fraud and money laundering in June. It is said that he secretly bought NFTs that he had chosen for OpenSea’s homepage and then sold them for a profit after they had been highlighted. This is the first time insider trading has been charged with digital assets. Chastain has said that she is not guilty.
In a request to throw out the lawsuit that Chastain sent to the court on Friday, he said that prosecutors’ claim that he stole his own ideas for the website would “criminalize routine civil workplace disputes.”
His lawyer said, “The government would have this court believe that if an employee is at work, has a thought, and then acts in accordance with that thought, then the employee’s thought—in and of itself—is the property of his employer,”
A person from the office of the U.S. attorney wouldn’t say anything.
According to Chastain, the U.S. Supreme Court has slowly narrowed the scope of the law that says it is illegal to work together to get something. He said that the choice to promote a certain NFT, which he called “ethereal” and “commercially worthless,” is not property.
The case raises another important legal question, which is whether insider trading on things other than stocks and commodities is illegal.
Chastain said that this is not true and that the law against insider trading is meant to protect the financial markets, not to keep company secrets secret.
“Absent any connection to the financial markets, insider trading, in any form or context, cannot exist,” he said.