Nathaniel Chastain, an ex-employee of OpenSea who served as their product manager, is now beginning his trial for charges pressed against him by the Manhattan US Attorney's office last year when he was accused of insider trading of NFTs.

This marks the first ever insider trading case related to non-fungible tokens, but is one that could set a precedent for any kind of asset not covered by any current regulation, according to the former SEC enforcement lawyer and partner at Seward & Kissel LLP, Philip Moustakis, who claims that "If this case sticks, there is precedent that insider trading theory can be applied to any asset class."

The trial is set to last around 1-2 weeks and is taking place in Manhattan before the US District Judge Jesse Furman, with Chastain facing one count of wire fraud and one count of money laundering. Chastain has been accused of taking advantage of confidential, non-public information to secretly purchase various NFTs that he knew would soon end up being featured on the home page of the OpenSea marketplace, with the former employee himself deciding which non-fungible tokens would be featured, thus making it possible for him to illegally profit by purchasing them before they are featured and then selling them afterwards. As a result of this, prosecutors claimed in an April 4 filing that he "abused that position of trust" while Chastain's lawyers disagree, claiming that the knowledge he had does not have any value to the company as it did not belong to OpenSea, thus stating that his actions cannot be considered insider trading as a result, with Chastain's lawyer David Miller saying that "We are not talking about securities trading" and that mentions of insider trading from the prosecutors can cause "substantial danger of undue prejudice and confusion of the jury."