BREAKDOWN: It's OpenSeason for Regulatory Enforcement
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 3 June 2022
⏱️ 18 minutes
🧾️ Download transcript
Summary
How the crypto industry should view recent insider trading charges.
This episode is sponsored by Nexo.io, NEAR and FTX US.
In September, then-OpenSea product manager Nate Chastain was discovered to be front running the market by using secret addresses to buy non-fungible tokens (NFT) from collections that the site was about to feature on its homepage. This week, Chastain was arrested in what the U.S. Department of Justice called the “First Ever Digital Asset Insider Trading Scheme.” On today’s episode, NLW breaks down the charges and the community’s reaction.
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Consensus 2022, the industry’s most influential event, is happening June 9–12 in Austin, Texas. If you’re looking to immerse yourself in the fast-moving world of crypto, Web 3 and NFTs, this is the festival experience for you. Use code BREAKDOWN to get 15% off your pass at www.coindesk.com/consensus2022.
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“The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsors is “Catnip” by Famous Cats and “I Don't Know How To Explain It” by Aaron Sprinkle. Image credit: microgen/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.1 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:15.0 | The breakdown is sponsored by nexo.io, near an FTX, and produced and distributed by CoinDesk. |
| 0:22.7 | What's going on, guys? It is Friday, June 3rd, and today we are talking about why it is open |
| 0:29.4 | season for regulatory enforcement. Before we get into that, a few housekeeping notes. |
| 0:35.7 | There are two ways to listen to the breakdown. You can hear |
| 0:39.0 | it on the Coin Desk podcast network feed, which features the breakdown as well as other great |
| 0:43.2 | coin desk shows. That one comes out in the afternoon. Or you can listen on the breakdown only feed, |
| 0:48.3 | which comes out in the evening of the same day. Wherever you're listening, if you're enjoying the |
| 0:52.8 | show, please slap a rating or review on it. |
| 0:55.2 | It makes a huge difference, and I appreciate each and every one. |
| 0:58.6 | Finally, a disclosure, as always, in addition to them being a sponsor of the show, I also work with |
| 1:03.1 | FTX. Now, today we are talking enforcement, and of course, if you couldn't tell from the pun in |
| 1:09.6 | the title, we're honing in on |
| 1:11.6 | the charges against a former OpenC executive. Let's get the overview and then let's get into the |
| 1:17.6 | details. Nathaniel Chastain, who I will note goes by Nate, is the former head of product at OpenC. |
| 1:24.4 | A grand jury has charged him with wire fraud and money laundering following an insider |
| 1:29.4 | trading scandal. He was arrested on Wednesday, and each charge carries a maximum sentence of 20 |
| 1:35.5 | years in prison. The accusation is that Chastain used his knowledge of which NFT collections |
| 1:41.7 | would be featured on OpenC's homepage to purchase NFTs from that |
| 1:45.7 | collection using dozens of secret Ethereum wallets. Importantly, it wasn't just knowledge of which |
| 1:51.0 | collections would be featured, but he was in fact responsible for selecting those collections. |
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