The Department of Justice Goes After Its First NFT Insider Trading Case – Ep 359

Jason Gottlieb, a crypto attorney and partner at Morrison Cohen, discusses the insider trading case being built by the US Department of Justice against former OpenSea employee Nathaniel Chastain. Show topics:

• why Nathaniel is being charged with wire fraud and money laundering instead of insider trading
• what makes NFT insider trading different from usual insider trading indictments
• why an employee’s “duty of confidentiality” can be important when building an insider trading case
• whether the money laundering charge makes sense 
• whether moving money between self-custodied wallets constitutes money laundering
• why Jason does not think this particular case will have widespread implications for the NFT and crypto space
• Jason’s advice for employees at crypto exchanges and companies who may be tempted to trade on private information
• what happens next in the Chastain case
• why the potential sentences are so long – 20 years for each charge
• how likely it is that Chastain has to serve jail time

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Episode Links

Jason Gottlieb

• Website: https://www.morrisoncohen.com/jgottlieb
• Twitter: https://twitter.com/ohaiom 

Department of Justice Press Release

• https://www.justice.gov/usao-sdny/pr/former-employee-nft-marketplace-charged-first-ever-digital-asset-insider-trading-scheme 

Nathaniel Chastain

• Arrest
• • https://www.coindesk.com/policy/2022/06/01/us-charges-ex-opensea-exec-with-nft-insider-trading/
  • https://www.theblockcrypto.com/linked/149685/former-head-of-product-for-opensea-indicted-after-insider-trading-scandal
• Resignation
• • https://www.coindesk.com/business/2021/09/16/opensea-exec-accused-of-insider-trading-leaves-company/
• Insider trading allegations
• • https://www.coindesk.com/business/2021/09/15/insider-trading-allegations-rock-opensea-nft-marketplace-responds/
• Twitter
• • https://twitter.com/natechastain 

Insider Trading and Crypto

• https://www.morrisoncohen.com/siteFiles/files/Insider%20Trading%20and%20Cryptocurrency%20-%20A%20Primer%20for%20Traders.pdf
• https://papers.ssrn.com/sol3/papers.cfm?abstract_id=132529

Taylor Monahan Recap of the Case

• https://twitter.com/tayvano_/status/1532085029857284101 

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