Crypto Insider Trading Defendant Fights Back Hard on "Betrayal" Charge

OpenSea employee accused of insider trading fights back, subpoenas NFT marketplace

For a start, Chastain wants the court to order his former employer to provide documents showing that the information he used to turn a profit is considered “property” of OpenSea. The wire fraud charge argues that Chastain “betrayed” and defrauded his employer when he used confidential business information to make money for himself.

Chastain is looking to get hold of documents confirming whether OpenSea executives were aware of his alleged practices, including Slack messages between Chastain and other employees, documents regarding OpenSea’s employee and confidentiality policies, as well as any communications in which OpenSea CEO Devin Finzer and co-founder Alex Atallah referenced Chastain.

As for his case with the Justice Department, Chastain, in a September 30 filing, has asked the department to strike the term “insider trading” from the indictment against him, labeling usage of the term as “inflammatory, unduly prejudicial, and irrelevant to the crimes charged.” …

Congress breaks for midterm elections with stock trading bill in doubt. Good.

Despite headlines to the contrary, there is little evidence that unlawful insider trading — misusing nonpublic information to trade stocks — is widespread on Capitol Hill. Recent research disseminated by the nonpartisan National Bureau of Economic Research found that lawmakers reap no outsize return on their stock investments, including those made in areas in which lawmakers hold committee assignments.

Furthermore, potential conflicts of interest also exist in fund investments, real estate transactions and other business interests of lawmakers, their families and their staffs. Focusing only on stock ownership gives an incomplete picture, and it’s hard to imagine that prohibiting stock trading alone would do much to move the needle on the crisis of voters’ confidence in Congress. At the same time, prohibiting lawmakers from trading stocks might carry unintended consequences.

For one, it might limit the pool of people who are willing to run for office….

The SEC Should Leave Kim Kardashian Alone

Finally, there is the problem of selective enforcement. The internet has generated countless places in which people are promoting investments of various kinds. The growth of meme stocks set off in Reddit chat rooms is the latest example of the phenomenon. The price distortion caused by manipulators in these places is far greater than the impact of a bogus cryptocurrency. Ms. Kardashian’s celebrity prosecution makes good headlines, but it is unlikely to matter much in terms of the market. The jurisdictional limits of the SEC allow it to go after her and Floyd Mayweather, while Matt Damon’s Super Bowl ad for Crypto.com, part of a $65 million campaign, escapes enforcement because it was promoting a platform and not a security.

The SEC has more important tasks than taking on Kim Kardashian’s Instagram feed. If people are duped into betting on a crypto asset because she liked it, the SEC is unlikely to prevent them from making bad choices with their money. More important, bringing high-profile cases only makes matters worse by giving a false air of safety to unsafe investments. Investors and the SEC alike would be better off if we ignored Ms. Kardashian.

Penny-Stock Trader’s Imprisonment for Stiffing SEC Affirmed

A penny-stock trader’s challenges to a judgment in favor of the SEC for more than $12 million and to his subsequent incarceration for not complying with a payment plan failed Thursday.

Some of Edward Bronson’s arguments are untimely, and they all lack merit, the US Court of Appeals for the Second Circuit said in an unpublished order.

Big Law Attorneys Buy Crypto Despite Lack of Firm Guidance

Big Law attorneys are feeling free to buy cryptocurrencies—and some are doing so—as most firms lack policies that restrict investments in digital assets.

Lawyers including Joshua Ashley Klayman of Linklaters and Joe Cutler of Perkins Coie confirm they have purchased Bitcoin, and in Cutler’s case Ethereum as well, and others say they have opened crypto wallets to become acquainted with the technology.

“I’ve known more than a couple lawyers who made a ton of money” investing in crypto, said Stephen Palley, co-chair of Brown Rudnick’s digital commerce group in Washington. “I’ve also known others who bet big and lost everything.”

Lawyers are following their own paths when it comes to crypto investing in the absence of clear firm guidance and a dearth of federal regulations. Some make calls based on firms’ general cautions to avoid mixing their own finances with client business interests.

Blockchain in Binance Ecosystem Paused on Irregular Activity

An already bad year for cryptocurrencies took another turn for the worse after a $568 million hack affecting Binance Coin became the latest in a string of security incidents to buffet digital assets.

An exploit occurred on a bridge between blockchains and the issue is “contained now,” Changpeng “CZ” Zhao, the billionaire co-founder of Binance, the world’s biggest crypto exchange, said on Twitter on Friday.