Nathaniel Chastain, a former product manager at OpenSea, has had his motion to dismiss the wire fraud case filed against him by a Southern District Court in New York denied, The Block reported.

In a memorandum and order released this week, District Judge Jesse Furman formally disagreed, denying the motion to dismiss the indictment and saying the argument was “without merit.”

Chastain was accused in May by a grand jury for alleged misappropriation of OpenSea trading information under count one charge with respect to non-fungible tokens (NFTs) to be featured, thereby using the information to purchase NFTs before they appear on the page start of the company.

The indictment alleges that Chastain engaged in NFT “insider trading” from approximately June 2021 to approximately September 2021. More precisely, Chastain is accused of stealing from OpenSea, his employer, using the company’s trade secrets.

Chastain’s attorney testified in his filing to dismiss the case that NFTs are not commodities or securities and therefore insider trading cannot arise in any way or circumstance if there is no connection to the financial markets.

It also highlighted that the necessary movements of bitcoin from one personal digital wallet to another personal digital wallet are not and cannot be claimed by the government to constitute a “financial transaction” under money laundering legislation. Therefore, the indictment must be dismissed for the reasons stated above.

OpenSea facing current challenges

OpenSea has continued to thrive and develop its processes despite the challenges facing the digital ecosystem.

In August, OpenSea, the world’s largest marketplace for trading NFT products, released its new rules dictating how stolen digital artwork and other types of theft are handled on their platform.

Opensea has recently introduced a new functionality to its platform that allows users to bulk list and purchase up to 30 products at a time from the same chain in one cart before paying for them all in one transaction in a recent report.

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