Former OpenSea product manager Nathaniel Chastain is facing two counts of wire fraud and money laundering for allegedly using his insider knowledge to secretly buy 45 NFTs shortly before their listing and selling them with a profit immediately afterward. The trial, which is expected to last several weeks, could have a major influence on the legal classification of NFTs. If the case sticks, there is precedent that insider trading theory can be applied to any asset class, warned former SEC employee Philip Moustakis. Another recent court case involving crypto exchange Coinbase supported a motion to dismiss the insider trading case against the brother of the platform’s former product manager, arguing that the SEC had no jurisdiction to file a lawsuit given the tokens in question do not pass the Howey test.

(By DAVID ATTLEE)