NFT case promises to test boundaries of insider-trading laws

A former employee of NFT marketplace OpenSea has been charged with wire fraud in a case involving alleged insider trading. Nathaniel Chastain allegedly used his knowledge of what would be displayed on the site to buy NFTs ahead of time, prosecutors say. (Photo: Reuters) — A former employee of NFT marketplace OpenSea has been charged with wire fraud in a case involving alleged insider trading. Nathaniel Chastain allegedly used his knowledge of what would be displayed on the site to buy NFTs ahead of time, prosecutors say. (Photo: Reuters)

wsj

3 min read . Updated: 01 Sep 2022, 07:12 PM IST Richard Vanderford, The Wall Street Journal

A group of lawyers argues that prosecutors’ first NFT insider-trading case opens the door to an overly broad use of the wire-fraud statute to penalize unauthorized use of workplace information

Federal prosecutors, in bringing a novel case over trading in nonfungible tokens, will test whether fraud theories used to police capital markets can also apply to the more unorthodox NFT market that boomed during the Covid-19 pandemic.

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