Former OpenSea product manager, Nathaniel Chastain, has been accused of insider trading — marking the first criminal insider trading case involving digital assets, according to a Reuters report.

According to the report, Chastain has been accused of using confidential information to secretly purchase NFTs — later profiting by featuring and selling them on the OpenSea homepage.

Chastain charged by U.S. prosecutors

Chastain currently faces charges of wire fraud and money laundering after U.S. prosecutors accused him of “secretly buying dozens of NFTs based on confidential information,” according to the Reuters report.

Chastain’s defense lawyer, David Miller, argues that his actions do not constitute insider trading.

“We are not talking about securities trading.”

In an April 17 filing, Miller said that OpenSea’s new policies “did not consider – or treat – the relevant information to be confidential.

Former U.S. Securities and Exchanges Commission (SEC) enforcement lawyer Philip Moustakis said, “the case could have broader implications for assets that do not fit into existing regulations.”

Moustakis said:

 “If this case sticks, there is precedent that insider trading theory can be applied to any asset class.”

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