As the DOJ, SEC, and other regulators continue to ramp up their crypto enforcement teams, the US Attorney’s Office in the Southern District of New York stepped into the spotlight this week with an indictment alleging “insider trading” in the NFT market by an OpenSea employee. However a closer look at both the indictment and the statements of the US Attorney for the Southern District reveals that "NFTs might be new, but this type of criminal scheme is not."
The indictment alleges that the defendant who was in charge of selecting what NFTs would appear on OpenSea’s homepage bought about 45 NFTs before they were featured on the homepage. He then sold them for “between two and five times the purchase price” shortly after they appeared, profiting from the increase in value that typically followed when an NFT was featured on the homepage. Put another way he was allegedly front-running his employer’s market-moving promotions.
While this is an interesting case, it is unlikely to address the more substantial issues in the cryptocurrency/NFT regulatory space such as clarifying how a 1946 US Supreme Court case defining “a security” will be applied to a concept and technology that no one could have contemplated when it was written. This case will not be the one that provides clarity regarding that issue.
This case also demonstrates that what happens on the blockchain doesn’t necessarily stay on the blockchain. It has been reported that members of the NFT community may have tipped off...
Social media was flooded with claims that a girl had been assaulted by alleged Hindu and RSS supporters in the presence of Delhi Police personnel, who supposedly remained silent spectators. The cl...