It's OpenSeason for Regulatory Enforcement

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 4 June 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

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. - Nexo is an all-in-one platform where you can buy crypto with a bank card and earn up to 16% interest on your assets. On the platform you can also swap 300+ market pairs and borrow against your crypto from 0% APR. Sign up at nexo.io by June 30 and receive up to $150 in BTC. - NEAR is a blockchain for a world reimagined. Through simple, secure, and scalable technology, NEAR empowers millions to invent and explore new experiences. Business, creativity, and community are being reimagined for a more sustainable and inclusive future. Find out more at NEAR.org. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - 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. - “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.

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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