Unchained The Department of Justice Goes After Its First NFT Insider Trading Case - Ep 359
Jun 3, 2022
Jason Gottlieb, a seasoned crypto attorney at Morrison Cohen, unpacks the landmark insider trading case against former OpenSea employee Nathaniel Chastain. He explains why Chastain faces charges of wire fraud and money laundering instead of conventional insider trading. The conversation explores unique aspects of NFT trading, the significance of an employee’s confidentiality duty, and the legal complexities of moving funds between wallets. Gottlieb also shares insights on potential penalties and advice for crypto professionals navigating these murky legal waters.
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Charges Against Chastain
- Nathaniel Chastain faces wire fraud and money laundering charges, not insider trading.
- This is because there's no federal insider trading charge, and the DOJ uses wire fraud for internet-based schemes.
Classic Insider Trading
- Classic insider trading involves using confidential info from a company to profit from stock trades.
- This is covered by the Securities Exchange Act, focusing on fraud against those lacking the information.
Duty of Confidentiality
- Chastain's insider trading classification comes from his employer agreement, highlighting the duty of confidentiality.
- This duty is central to insider trading cases, as seen in U.S. v. Chestman, where its absence vacated charges.
