Trial of former OpenSea product manager could broaden regulators’ definition of ‘insider trading’

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Former OpenSea product manager Nathaniel Chastain’s trial has been almost a year in the making, and its outcome could be important not just for future NFT-related charges but also insider trading charges outside of financial markets.

The trial, which starts on Monday in New York, deals with two charges against Chastain for wire fraud and money laundering, each of which carries a maximum penalty of 20 years in prison. Federal prosecutors allege that the former OpenSea employee used confidential information about which NFTs were going to be featured on the marketplace’s homepage to personally profit. Chastain has pleaded not guilty.

Chastain’s attorney declined to comment. The Department of Justice did not immediately respond to a request for comment.

In a statement announcing Chastain’s arrest and indictment, the Department of Justice labeled the case against him the “First Ever Digital Asset Insider Trading Scheme.” And yet, Chastain has not been charged with “insider trading,” according to its legal definition.

According to past interpretations of…

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