[HN Gopher] Former OpenSea employee charged in digital asset ins...
___________________________________________________________________
Former OpenSea employee charged in digital asset insider trading
scheme
Author : omarfarooq
Score : 197 points
Date : 2022-06-01 17:11 UTC (5 hours ago)
(HTM) web link (www.justice.gov)
(TXT) w3m dump (www.justice.gov)
| TaylorGood wrote:
| Silly. He was the face/favorite/twitter voice of OpenSea during
| his employment there, and he blew it for what.. 18 ETH in "fast"
| gains?
| boeingUH60 wrote:
| It's funny how after being exposed for insider trading (before
| this formal indictment), this guy went on to launch another NFT
| startup
|
| https://www.coindesk.com/business/2022/03/31/opensea-exec-wh...
| itsoktocry wrote:
| > _this guy went on to launch another NFT startup_
|
| a16z just put $80 million into Adam Neumann's new crypto idea.
| Everybody is, shamelessly, out to get theirs.
| dvtrn wrote:
| I have a friend that I am watching in real time _literally_
| bankrupt themselves trying to find the golden NFT ticket that
| will turn them into a millionaire.
|
| They've openly said as much.
|
| If it happens I'll eat my proverbial shoe but so far all I've
| seen come from it is them losing their job, home and college
| scholarship in the span of about 6 months.
|
| It's...tragic.
| TaylorGood wrote:
| As someone who got into BAYC during mint week, I knew it
| was 2021's version of CryptoPunks, but still couldn't have
| told you it would surpass X amount in value.. Doodles,
| MoonBirds, freakin' Goblins... surprised nearly every time.
| exdsq wrote:
| Should have used that money to trade several of the same
| brand of NFTs to build the trading volume up :P
| fullshark wrote:
| Hey it beats working for the man for 40+ years, enjoying a
| modest retirement, then dying.
| seattle_spring wrote:
| Lucky for him and everyone else, there are more than just
| these 2 options.
| SilverBirch wrote:
| This is such a naive take. It's not "Well maybe I'll lose
| some modest savings I have, maybe I'll hit the jackpot
| and make $1m". It's not a 1% chance you make $1m. It's
| not 0.1%. It's not 0.0001%. That 1 in a million chance?
| It's not _even_ 1 in a million. It 's more like a 0%
| chance. You're taking your modest savings and you're
| trading them for the incorrect hope that someone is going
| to hand you $1m for nothing. You're buying magic beans
| but you don't live in a fairy tale.
|
| Do you know what happens after you throw your money into
| the wishing well? You work for the man for 40+ years and
| you won't enjoy a modest retirement.
| wly_cdgr wrote:
| :shrug: I made about $80k off a ~$5k risk
| speculating/gambling during one of the earlier crypto
| waves. Did I know what I was doing? Hell no lol. Was I
| aware that there were a ton of people out there
| manipulating these markets using any and all insider info
| they could get their hands on? Of course
|
| But the fact of the matter is, that $75k profit was
| incredibly useful to me that year, whereas having or not
| having that $5k wouldn't have made any difference. And
| gambling on crypto was my only chance to get the 10x+
| return I needed in such a short time span
|
| Playing the lottery can be a perfectly sensible and
| rational strategy if it is your only chance of escaping
| wage slavery before 60+, as is the case for the majority
| of people, and you are someone who values financial
| independence highly enough
| jjnoakes wrote:
| This is not good advice. The fact that it worked for you
| is an absolute fluke, and it is not sensible nor rational
| to gamble like that, especially if you need money badly.
| duxup wrote:
| Reminds me of the film "The Graduate". Benjamin's dad was
| trying to get him in to a career "plastics" where Ben
| might have some freedom / financial freedom.
|
| Ben had no interest in it and instead by rejecting it is
| heading for a far less desirable outcome, even from Ben's
| point of view.
| fullshark wrote:
| True young people are naive and overestimate their chance
| at success, it's why they can be so charming some times,
| and clueless other times.
| duxup wrote:
| That's what he is headed for, maybe sans modest
| retirement...
| beepbooptheory wrote:
| Maybe this is a little sarcastic but i do honestly think
| this argument has a lot traction to especially younger
| people. You can yell to your red in the face about how
| its all a scam, its immoral, its built to crash, but I
| think a non negligible amount of people still think its a
| better ride than any other options available to them. Its
| not right or wrong, just is what it is.
| [deleted]
| fleddr wrote:
| You're absolutely right and this is the part that many do
| not understand about crypto culture.
|
| Its players are fully aware of most of it being a casino.
| They play anyway. They do not want to be "rescued" by
| your moral preaching or regulation, they willingly take
| big risks, often lose it all, and then do it again.
|
| Crypto, as they see it, is the only asymmetrical bet of
| their lifetime. The only way to "make it". And making it
| doesn't even have to mean millionaire status, it could
| just mean any type of life improving wealth.
|
| So "adults" preaching about why they can't just be
| "normal" and financially sane, are deeply out of touch.
| "Normal" as in...student debt, stagnant wages,
| unaffordable housing, healthcare costs that can bankrupt
| you, double digit inflation, one crisis after the other
| (9/11, financial crisis, COVID, war), job insecurity,
| climate change, political boiling pot...that kind of
| "normal"?
|
| Many if not most young people cannot get ahead by doing
| "normal". They can't even reach middle class. If doing
| all the right things leads to a miserable result, any
| escape hatch is embraced.
| jazzyjackson wrote:
| totally agree with you, but I wonder if things would be
| different if the players of the casino were aware that
| the jackpot winners were plants, fakes, renting
| lamborghinis or worse, actually profiting on money
| laundering schemes while passing it off to their
| instagram followers as being a good day-trader.
|
| just shaking my head that anyone thinks putting their
| life savings into an alt-coin has any chance of going
| well for them
| dvtrn wrote:
| For my part...
|
| _Crypto, as they see it, is the only asymmetrical bet of
| their lifetime_
|
| this is the part that makes me feel the most cynically
| incredulous about some of the claims and aspirations not
| just from my friend but others who have bought entire box
| cars on the web3 hype train, andit's probably my own
| biases and notions about the world, but:
|
| _is it really all that asymmetrical_? I presume you mean
| in the same spirit that the people who jumped in on the
| GameStop wagon did so not only because they saw dollar
| signs, but they bought into the notion that there had
| been some discovery, an inefficiency to exploit and they
| were "sticking it" to the institutional trading system
| by refusing to sell?
|
| If that's not what you meant, feel free to stop reading,
| as my skepticism is borne out of completely
| misunderstanding your point (and I concede the
| misunderstanding on my part).
|
| On the other hand if so....
|
| I don't see the asymmetry, really. I just see a new set
| of thumbs on the scale. That's the cost of admission
| isn't it? Is that what I've been so oblivious to in my
| own apoplectic shock at all of this?
| fleddr wrote:
| Say you have 10K USD. If you don't know what you're
| doing, take extraordinary risks, have poor timing or just
| bad luck...you'll lose all of it. If you do know what
| you're doing, you can turn it into 20K, 30K, 50K, 100K.
|
| The potential upside is many multiples of the downside,
| hence it's asymmetrical. There's no asset I can think of
| with this potential upside on such small timescales.
|
| Isn't it risky? Yes it is. Like I said, -100% when fully
| incompetent. Against many multiples of potential upside.
| That's what makes it asymmetrical.
| IanCal wrote:
| The asymmetry is not in information but in the potential
| gains and losses. Even if the overall EV is lower than 1,
| it's about risking PS100 for a potential PS10000 or other
| much larger figure, 10x/100x/10000x.
| dvtrn wrote:
| Yeah on the one hand I'm not against trying to get out of
| the grind and achieve that sweet financial independence.
|
| Would I throw $25,000 into NFT's to get there though?
|
| Eh. Probably not.
| [deleted]
| onlyrealcuzzo wrote:
| It seems it'd be a lot easier to just get a jog at FAANG
| for 2 years...
| giarc wrote:
| What I don't get about Neumanns new project is it actually
| solving a problem? As I understand, the problem with carbon
| offsets is not that you can't track them, it's that you can
| verify that X company actually planted a tree etc. Is
| Neumanns company solving this, or just simply putting a
| record of Y company purchasing 1000 carbon offsets on the
| blockchain?
| TaylorGood wrote:
| As someone very active in that space, he went dark after the
| OpenSea incident and it's not widespread that he started
| something new. This is also news to me.
| tyrfing wrote:
| That's an interesting case. It's basically a single wire fraud
| charge, with money laundering added on due to making new accounts
| to commit the alleged crime.
|
| There are recent developments in the area (Kelly and Blaszczak
| cases) but this probably isn't affected. The crime is using
| "confidential business information", recognized as a form of
| intangible property, for personal benefit; the victim is OpenSea.
| Since the resulting money wasn't taken from anyone, they are
| seeking forfeiture. It seems like this is somewhat related to a
| shift from insider trading prosecution to general criminal fraud
| statutes (insider trading as embezzlement.)
|
| Not a lawyer, would love to see analysis from someone who knows a
| bit more.
|
| https://www.yalelawjournal.org/pdf/130.Lustbader_r3uhyngc.pd...
| encryptluks2 wrote:
| Not a lawyer, but from my perspective... if you're part of the
| club you can insider trade all you want. Just look at Nancy
| Pelosi.
|
| If you aren't part of the club, then they'll charge you for it.
| hamiltonians wrote:
| lol took many years to arrest elizabeth holmes for a far, far
| bigger fraud. goes to show how when it comes to crime either go
| really big or not at all.
| anm89 wrote:
| On one hand I support this. On the other hand, pinning one guy to
| the wall in an industry where every single person is doing this
| seems a bit unethical.
|
| The real smart move is to stay as far from the NFT market as
| possible because the whole thing is rotten at its core.
| tofuahdude wrote:
| There must be 1,000 cases like this for every one that is
| prosecuted.
|
| The crypto community did the research / job for the FBI here.
| hamiltonians wrote:
| not really. how many nft marketplaces are as big as opensea?
| this was a big target.
| berberous wrote:
| Well, that's the point of these cases. This guy is
| (unfortunately for him) being made an example of, with a
| potentially very harsh sentence, in order to scare away the
| other 999. The next guy in his shoes will think twice.
| nradov wrote:
| The next guy will put his shoes in a country without an
| extradition treaty and not even think once. And honestly I
| don't even blame the scammers. Anyone stupid enough to buy an
| NFT deserves to get scammed.
| berberous wrote:
| You are just ranting about things irrelevant to this story.
|
| Nate is not a scammer, but was a product manager at a very
| successful A16Z-backed startup. He is the type of guy that
| was already going to be successful and wealthy, but decided
| to make a little more after incorrectly assuming that
| either (x) what he was doing wasn't illegal since he wasn't
| trading stocks or (y) the government wasn't looking into
| this type of thing. The DOJ is now disincentivizing others
| in his shoes from following the same path. This type of
| person was never going to move to a random country without
| extradition to straight up scam people.[0]
|
| Your comment is akin to someone saying it's a waste of time
| to charge a US F500 employee or hedge fund employee with
| insider trading since a true scammer would just be sending
| phishing emails from Russia. They are different types of
| crimes and criminals, and I think for this type of
| crime/criminal, there is a deterrence effect to these
| cases.
|
| And regardless of your view on NFTs, nobody was scammed
| here, he just front-ran to make a profit and used
| confidential information of his employer to do that. This
| is akin to a production intern for Jim Cramer buying stocks
| that he knows Jim will talk about on his show that evening,
| to profit from any short-term pump from the exposure.
|
| [0] I don't actually know Nate or any of the details here,
| so I am assuming, but this is the sense I get from
| following this drama on Twitter.
| TaylorGood wrote:
| It was beyond reckless on Nate's part. He was a darling
| in the space, had a punk prior to this side hustle, and
| just blew himself up - not in a good way.
| dylan604 wrote:
| >The DOJ is now disincentivizing others in his shoes from
| following the same path.
|
| Extreme counter example: How's the death penalty working
| to disincentivize murder? How has any other example
| worked? People are still commiting these crimes even
| while people are getting caught and going to jail when
| the DOJ decides to do something.
|
| For those that are criminals, these laws are just part of
| the game. Keeping the odd person that might think about
| it when in desperate situations are not the ones
| commiting the mass amount of these crimes. We're focused
| on the wrong people.
| recursive wrote:
| > How's the death penalty working to disincentivize
| murder?
|
| We can't really know unless we can compare the results to
| those under another system.
| FrenchDevRemote wrote:
| "This is akin to a production intern for Jim Cramer
| buying stocks that he knows Jim will talk about on his
| show that evening, to profit from any short-term pump
| from the exposure."
|
| Is that actually insider trading?really not sure...
| toss1 wrote:
| While I'm no securities attorney, I can assure you that
| it is most assuredly insider trading.
|
| The key words are "material non-public information".
|
| IF it is information and IF that information might make a
| material difference, it could be subject to insider
| trading.
|
| IF that material information is time-sensitive, and it is
| _not yet available_ to the general public, then I can
| assure you that it is subject to insider trading rules
| (as Nathaniel Chastain is now discovering to his
| detriment).
|
| If such were not the case, then there would be queues of
| people wanting to work for free as interns at every
| financial wire service.
|
| I can also report that a family member has worked at some
| major law firms (which do work for major corps &
| individuals), and they, and their family are specifically
| forbidden from trading in individual stocks without
| specific advance permission for each trade. This is to
| both avoid even the appearance of impropriety, and also
| just so everyone knows that if you break the rule and it
| ever comes up as a problem, you'll be fired in a New York
| Second [1].
|
| [1] New York Second = the amount of time between the time
| a light turns green and the driver behind you hits the
| horn if you aren't already moving - considerably shorter
| than the standard International Atomic Time second.
| ghaff wrote:
| IANAL but probably. The intern is trading on (possibly)
| material non-public information. Now, if the intern is
| just making a small purchase, they may well get away with
| it. But trading on things like inside financial
| information, an M&A, major partnership, etc. before
| they're made public (I think the language one sees is
| actually before the public has had time to absorb the
| information) is pretty much the definition of insider
| trading.
| thebean11 wrote:
| > But trading on things like inside financial
| information, an M&A, major partnership, etc. before
| they're made public
|
| Yeah none of that stuff is in Jim Cramer's show lol
| ghaff wrote:
| I don't know if Cramer actually does move markets or not.
| I guess the defense would be that Cramer is just some
| clown with a finance show and no one takes him seriously.
| It's just entertainment.
| tqi wrote:
| Short term, it seems like probably? [1]:
|
| > There are studies depicting the market's reaction to
| recommendations made on Cramer's show. Notably, in
| January 2009, graduate students from the University of
| Pennsylvania published a study claiming that over time,
| the average next-day increase for a stock that Cramer
| recommended was 3% for the entire study sample, and
| almost 7% for smaller cap stocks. They proved through the
| use of electronic communication networks (ECN) that most
| trades came in after 7 p.m. ET, when "Mad Money"
| concluded.
|
| > Another study conducted by Northwestern University,
| titled "Is the Market Mad?: Evidence from 'Mad Money'"
| and published in 2006, showed that the average cumulative
| return on Cramer's recommendation was 5.19%, but, more
| important, almost all the increases were nullified within
| 12 days.
|
| > Cramer recommends stocks with momentum, both positive
| and negative. His recommendations affect the price, with
| the impact reversing quickly, consistent with pricing
| pressure caused by viewers' jumping on Cramer's
| recommendations. Cramer's sell recommendations also
| affect prices, though the impact does not quickly
| reverse.
|
| [1] https://www.investopedia.com/terms/c/cramerbounce.asp
| cyanydeez wrote:
| After a 1000 others just scammed their way through
| practice9 wrote:
| This is one of the benefits of the transaction data being on-
| chain
| rvz wrote:
| There you go. This is why committing insider NFT trading
| using a public blockchain where the transactions are
| traceable where the authorities can use that and the
| transactions all end up being connected to this employee
| (even though they tried using multiple wallets) is quite
| futile and eventually they can be traced all up.
|
| Goes to show that such blockchains like Bitcoin, Ethereum,
| etc are NOT anonymous and never intended it to be as such in
| their white-papers. So it's quite disingenuous for anyone to
| keep suggesting that they are _' anonymous'_ whether or not
| if they are skeptic, supporter or neither.
|
| What you are looking for is privacy coins like Monero,
| Mobilecoin, Zcash or Grin that specifically aim for privacy
| guarantees which are used to hide wallet balances and
| transaction details. But the regulators are going to
| crackdown on privacy ones anyway by making it harder to trade
| them for fiat via exchanges.
| ceeplusplus wrote:
| No, this guy was just dumb enough to buy the NFTs mere
| _minutes_ before they were listed. That 's blatantly
| obvious insider trading. If he had not been so obvious and
| maybe better laundered his money through e.g. Tornado Cash
| then he would've gotten away with it.
| exdsq wrote:
| I doubt he thought it was illegal
| practice9 wrote:
| I agree. Adding to a point about privacy coins - zk-SNARKS
| or zk-STARKS can be implemented on Ethereum via L2 rollups
| for those who need privacy/non-traceability. But probably
| not on a base layer.
| cuteboy19 wrote:
| It's pseudonymous. You don't get to know who it is until that
| person tells you their name
| colejohnson66 wrote:
| Supposedly Monero is better at being anonymous than
| Bitcoin/Etherium, but NFTs are all on Etherium
| chrisco255 wrote:
| Monero can't do smart contracts as far as I know. However
| there is somewhat of a push to adopt privacy focused zero
| knowledge rollups, which would preserve privacy while
| settling on a layer 2: https://aztec.network/
| ChainOfFools wrote:
| Most, not all. A few of the earliest (appearing before the
| term NFT existed) run on Bitcoin itself, using the
| counterparty protocol.
| TedDoesntTalk wrote:
| No mention of how much he earned with this scheme.
| TaylorGood wrote:
| It's well known within the space.. in total he made ~18 ETH
| from this side hustle.
| hamiltonians wrote:
| probably not that much, 100k or so.these were not ape nfts.
| chrisco255 wrote:
| Claims he is charged with insider trading but he's actually being
| charged with money laundering and wire fraud. There are no laws
| on the books against insider trading NFTs. Even the closest
| physical counterpart, art auctions, collectibles, etc have no
| such laws against using insider info to personal advantage.
|
| The charges in this case, seem egregious?
| colechristensen wrote:
| Money laundering is illegal itself without requiring _other_
| illegal activity at all, the act of hiding sources and
| destinations is itself against the law. Likewise wire fraud.
|
| And NFTs are securities, or at least this is the argument. The
| laws barring insider trading apply to securities in general,
| individual types of securities need not be enumerated in each
| law. Collectables are not securities, they are the actual thing
| and thus not covered.
| teraflop wrote:
| In this case, the money-laundering statute with which
| Chastain is being charged -- 18 USC 1956(a)(1)(B)(i) --
| _does_ require that the transaction was originally "designed
| in whole or in part" for a purpose that is itself illegal,
| namely the wire fraud.
|
| The wire fraud indictment, in turn, seems to hinge on the
| allegations that Chastain used "false and fraudulent
| pretenses, representations and promises" (namely, using
| anonymous accounts to flip the NFTs) and acted "in violation
| of the duties he owed to OpenSea" (namely, by using OpenSea's
| confidential data for personal gain, contrary to an agreement
| he signed).
| colechristensen wrote:
| I'm under the impression that as an employee also you don't
| have to sign a specific agreement not to use company
| insider information for personal gain, but having signed
| that agreement strengthens the case that the accused knew
| what he was doing was illegal.
| encryptluks2 wrote:
| Since when did violating an employment agreement become a
| criminal issue? Next thing you know they'll be charging
| people for switching employers.
| chrisco255 wrote:
| Everyone on OpenSea uses anonymous accounts to buy and sell
| NFTs though.
|
| It sounds like he's guilty of some sort of civil infraction
| but not a criminal one. He's being charged with major
| felonies here.
| chrisco255 wrote:
| NFTs are not securities any more than Furbies or Cabbage
| Patch dolls or baseball cards or Magic: The Gathering limited
| edition packs.
|
| This argument doesn't hold water because the Howey test is
| very clear about what defines a security and art based NFTs
| are no such thing. Just because some people speculate on a
| commodity going higher in price does not make it a security.
|
| He is not being charged with insider trading. There is no
| argument even being put forth by the DOJ that he violated
| securities laws. He's being charged with wire fraud and money
| laundering.
| ABeeSea wrote:
| Seems that he defrauded his employer and employer's customers.
| The original NFT owner should have gotten the profit from the
| front page listing.
|
| A physical analog would be an art rep for Sotheby's directly
| buying a piece from a perspective seller and then auctioning
| the piece themselves through Sotheby's through a third party to
| hide it from their employer.
| chrisco255 wrote:
| If he was buying these NFTs they were already for sale on the
| open market. Most of these NFT sales are not auctions but
| direct, "buy it now" listings.
|
| A physical analog would be someone buying an obscure comic
| book series or packs of Yu-Gi-Oh cards before they got
| featured by a national expo or collectible marketplace. And
| then flipping them for a higher price after the hype train
| started.
| twox2 wrote:
| Is this a crime if you know ahead of time it's going to be
| listed?
| [deleted]
| yieldcrv wrote:
| Note: they are charging him with wire fraud and money laundering.
|
| The DOJ is not attempting any insider trading specific charge or
| aiming to define the NFT assets traded. But _like_ insider
| trading, the wire fraud charge is contingent on the existence of
| the confidentially agreement with his employer.
| chrisco255 wrote:
| Insider trading is not contingent on a confidentiality
| agreement with an employer. It's an actual law on the books:
| https://www.law.cornell.edu/wex/insider_trading
| yieldcrv wrote:
| It is contingent on having a fiduciary duty with the issuing
| organization, just like your own source says. For non-
| directors, this duty comes in the form of confidentiality
| agreements that are part of standard employment contracts
| (but can take any form, and the wording must be evaluated by
| the prosecutors independent of the action they wish to
| prosecute).
|
| Note, that it also relies on the thing being traded being a
| security. Which the DOJ here decided to avoid trying to
| figure out, by specifically not leveraging the insider
| trading fraud statutes.
|
| And therefore they stick with the super broad wire fraud
| statute, the fraud part being extended to the breach of
| fiduciary duty. They otherwise wouldn't have a tool to
| prosecute this action that.
| chrisco255 wrote:
| Seems like a stretch from the DOJ. I wonder if plaintiff
| settles or goes forward with the trial.
| dragonwriter wrote:
| > Seems like a stretch from the DOJ. I wonder if
| plaintiff settles or goes forward with the trial.
|
| The "plaintiff" in a criminal trial is called the
| prosecution, and it is DOJ.
| yieldcrv wrote:
| absolutely agreed, it is quite a stretch but its not how
| I would have led with the conversation because people
| want this guy to have consequences.
| twox2 wrote:
| IMO, I think the way he was publicly lambasted and fired
| was punishment enough. Not to mention that shortly after,
| people were calling for him to return to OpenSea, because
| they were struggling without him for a hot minute.
|
| I agree what he did was stupid and wrong, but I think
| he's the wrong person for the DOJ to throw the book at.
| They are only targeting him, because this was low hanging
| fruit due to the public outcry around this incident.
| alphabetting wrote:
| Disagree with most of this. It couldn't be more clearly
| textbook insider trading. He wouldn't have bought the
| NFTs and then immediately sold them for 5x profits if he
| didn't know OpenSea would be featuring them.
|
| >I think he's the wrong person for the DOJ to throw the
| book at
|
| Who cares if other people have done worse? When you break
| the law you should face consequences.
| yieldcrv wrote:
| our realization is that we don't really have laws to
| cover this. insider trading is exclusively a securities
| law violation, which requires securities to have been
| traded. the NFTs in question are not securities and the
| actions around them are not being prosecuted as such. the
| remaining laws the prosecutors came up with are such a
| stretch that it seems like a waste of public resources,
| although "wire fraud" is sufficiently broad enough it may
| still be _either_ kind of weak, _or_ , not the expansion
| we want.
|
| Case in point, "wire fraud" is typically a tacked on
| charge, in addition to another charge. and "money
| laundering" is also a tacked on charge, that requires an
| illicit origin, not just the action of obfuscation or
| movement of money. So they have to tie a couple things
| together solely because "we don't like what happened",
| but it may be the wrong authority to deal consequence.
|
| It has nothing to do with a public understanding or a
| legal understanding of insider trading, because that's
| not what he was charged with, despite his trades being
| the catalyst for this indictment. semantics, but relevant
| semantics. you can insider trade _everything_ except
| securities. you can have a market advantage on spot
| commodities, real estate, trading cards, you name it. but
| yes its typically a form of fraud when you can be proven
| to have created more demand than was really there +
| trading on that + when your employer has entrusted you
| not to do that. there are many circumstances where this
| would all be a non-case.
| dubswithus wrote:
| Will the buyers of the NFT's be able to sue this guy?
| colechristensen wrote:
| Seems like they would have a decent case.
| olalonde wrote:
| What is the alleged fraud then? It seems pretty clear that this
| is what he is accused of:
|
| > From at least in or about June 2021 to at least in or about
| September 2021, CHASTAIN used OpenSea's confidential business
| information about what NFTs were going to be featured on its
| homepage to secretly purchase dozens of NFTs shortly before
| they were featured. After those NFTs were featured on OpenSea,
| CHASTAIN sold them at profits of two- to five-times his initial
| purchase price. _To conceal the fraud_ , CHASTAIN conducted
| these purchases and sales using anonymous digital currency
| wallets and anonymous accounts on OpenSea.
| JohnJamesRambo wrote:
| You love to see it.
| twox2 wrote:
| Not really, they're making an example out of some guy that made
| an opportunistic bad decision, but meanwhile there are
| criminals defrauding people of a lot of money in the NFT space
| and are allowed to operate in the open.
| JohnJamesRambo wrote:
| Every one of the insider trading crypto guys just paid
| attention today. That's a win for the little guys.
| TrackerFF wrote:
| Would be nice if they also went after all the wash trading.
| hanniabu wrote:
| It's not illegal for crypto as of right now
| gregors wrote:
| Coinbase was fined 6.5 million for wash trading crypto
|
| https://www.cftc.gov/PressRoom/PressReleases/8369-21
| danso wrote:
| This guy was noticed because tumbled crypto was sent back to his
| main and publicly known wallet. Obviously he did lots of other
| careless things (e.g. operate sock puppet accounts that did
| nothing but do early buys of OpenSea front page NFT). But
| couldn't he have at least sent the money to other anonymous
| wallets and then cash out?
| parineum wrote:
| > anonymous wallets and then cash out
|
| How do you stay anonymous and cash out?
| 2OEH8eoCRo0 wrote:
| Impossible. The information to identify you is out there-
| it's the hope that nobody will piece it together.
| Saint_Genet wrote:
| So you're saying he bathed apes?
| hamiltonians wrote:
| dude should have done fake Saylor youtube livestreams instead.
| More $ and no arrests.
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