Nate Chastian’s case could provide a watershed moment
OpenSea, the popular Ethereum NFT marketplace, is facing issues with the alleged insider trading of a previous team member.
Check out the hottest NFTs at OpenSea
31-year-old Nate Chastian could now face up to 40 years in prison as regulators target the crypto industry.
Allegedly, Nate Chastian got early information as Product Manager about which NFT collections would be featured on the home page.
OpenSea is taking action
Chastian faces charges for buying said NFTs in advance of their homepage listing and cashing out quickly with major profits.
The alleged insider trading first came to light in September 2021 when then the start-up had few restrictions around employees using privileged information to invest in NFTs.
OpenSea is now taking action by banning team members from buying or selling from collections or creators. The ban applies during company features or promotions.
In addition to the latter, OpenSea is also barring staff from using confidential information to purchase or sell any NFTs. This measure includes all NFTs, whether available on the platform or not.
We can expect more upcoming regulations in the industry due to incidents and potential bad actors.
Up until today, it wasn’t clear if prosecutors could go after bad actors for insider trading with NFTs. This case shines a light on just how bad things are in the crypto space overall as NFTs are still a massive grey area and not considered securities.
Legal clarity for digital assets is missing despite the blockchain providing the most transparent and useful record of transactions. However, until now, regulators paid little attention.
Exposing bad actors
There was little talk of regulations or changes when the bulls were out running and everyone was smiling. Until the issues around stablecoins and UST shook the industry hard.
Macroeconomic events confirm a bear market alongside record amounts taken in hacks and exploits. All these incidents have created a narrative locked onto safety, trading regulations, and exposing bad actors and scams.
PoolTogether is facing a lawsuit by a former employee of a very outspoken anti-crypto Senator.
In an ironic move, they launched an NFT collection to help them fund and fight a legal battle. Uniswap is also under scrutiny facing a class-action lawsuit against its developers and VCs.
The class action against Uniswap claims that its creators are responsible for “rampant fraud on the exchange”.
According to the class-action, Uniswap must register as a broker-dealer with the Financial Industry Regulatory Authority, or FINRA.
Those of us that came for the money and stayed for the tech are now arguably more than happy with the evolution of regulations and the entire industry getting a good hose down.
Moreover, if this industry is to disrupt at the pace it has done thus far, we need more legal clarity around what is and isn’t acceptable.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.