July 16, 2024

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Nathaniel Chastain, former Head of Product at OpenSea has been denied the motion to dismiss the wire fraud case leveled against him by a Southern District Court in New York as reported by The Block.

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In a memorandum and order published in the week, District Judge Jesse Furman expressed his formal disagreement, denying the motion to dismiss the indictment, stating that the argument “is without substance.”

 

Chastain was indicted in May by a grand jury for allegedly misappropriating OpenSea’s business information under count one charge as regards which Non-Fungible Tokens (NFT) are going to be featured thus using the information to buy NFTs before they are featured on the company’s homepage.

 

The indictment claims that Chastain engaged in “insider trading” of NFTs from approximately June 2021 until approximately September 2021. More precisely, Chastain is accused of stealing from OpenSea, his employer, by using the company’s trade secrets.

 

Chastain’s Attorney stated in his filing to dismiss the case that NFTs are neither commodities nor securities and therefore Insider trading cannot arise in any way or circumstance if there is no connection to the financial markets.

 

He also highlighted that the necessary bitcoin movements from one personal digital wallet to another personal digital wallet do not and cannot be claimed by the government to constitute a “financial transaction” under the money laundering legislation. The indictment must therefore be dismissed due to the reasons stated above.

 

OpenSea in the Face of On-going Challenges

 

OpenSea has continued to thrive and develop its processes in spite of challenges that are being faced in the digital ecosystem.

 

In August, OpenSea, the largest marketplace in the world for trading NFT goods, made public its new rules dictating how stolen digital artwork and other types of theft are handled on its platform.

 

Opensea has recently introduced new functionality in its platform that allows users to bulk list and buy up to 30 products at once from the same chain in a cart before paying for them all in one transaction in a recent report.

Image source: Shutterstock

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