U.S. prosecutors squared off this week against a former employee of OpenSea in what is considered the first criminal insider trading case involving non-fungible tokens, or NFTs. Prosecutors have accused Nathaniel Chastain, a former product manager for OpenSea, of secretly buying dozens of NFTs based on confidential information that they—or other products from the same creators—would soon be featured on OpenSea’s home page. Jurors began deliberations in the case on Monday.
The charges against Chastain were the first in a series of high-profile cases related to digital assets launched by the Manhattan U.S. Attorney’s office last year, which has also brought charges against FTX founder Sam Bankman-Fried.
Elsewhere, a federal judge in Texas last week ordered the head of a South African firm to pay a whopping $3.4 billion for what the U.S. commodities regulator said was its largest-ever fraud case involving bitcoin. The Commodity Futures Trading Commission charged Cornelius Johannes Steynberg in July, alleging his firm Mirror Trading accepted and misappropriated at least 29,421 bitcoin from about 23,000 participants in the U.S.
Meanwhile, Coinbase told the U.S. Securities and Exchange Commission that it has not broken any securities laws in its formal response to a legal threat it received from the regulator. Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal said the crypto exchange would like to list securities in the future but would not feel comfortable given the regulatory uncertainty, in a response to the SEC made public last week.
On Tuesday, Coinbase doubled down on its move to expand its operations outside the U.S., launching an international exchange for cryptocurrency derivatives. The exchange will let institutional users in eligible jurisdictions outside the U.S. to trade in perpetual futures, Coinbase said. Last month, Armstrong had warned that crypto firms would develop in “offshore havens” unless the U.S. and Britain make their rules for the industry much clearer.
