A Judge Denied Former OpenSea Employee’s Motion To Laundering Charges

A former employee of the NFT marketplace OpenSea failed to persuade a court that the allegations against him should be dropped, allowing his trial to proceed.

Nate Chastain, the former OpenSea head of product, has been charged with wire fraud and money laundering. According to the authorities, Chastain unlawfully benefited from the selling of NFTs in 2021.

Chastain was in charge of determining which NFTs would appear on the exchange’s homepage. The indictment claims that using this power and information, he acquired specific NFTs before they were highlighted and then sold them for a profit once their value had grown.

Prosecutors also claimed that Chastain established up wallet addresses to keep the NFTs and benefit from them.

After learning of the probe, OpenSea decided to cut ways with Chastain last month. According to a corporate blog post, it also requested the assistance of a third party to perform a complete analysis of the occurrence and give recommendations on how we might tighten our existing controls.

According to a court document, Chastain tried to have the charges dropped, presenting a variety of reasons that ultimately failed to influence the judge in the case.

Chastain contended that the allegedly stolen information is not ‘property’ within the statute and that the wire fraud charges should be dropped. He further claimed that he did not conduct wire fraud since it requires the actuality of trading in securities or commodities, which does not now include NFTs.

In terms of money laundering, he said that the government seeks impermissibly to penalize the simple transportation of money and failed to substantiate the concealment and financial transaction parts of money laundering allegations enough.

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