{"id":38287,"date":"2022-06-06T01:48:39","date_gmt":"2022-06-06T01:48:39","guid":{"rendered":"https:\/\/harchi90.com\/the-arrest-heard-round-the-crypto-world-techcrunch\/"},"modified":"2022-06-06T01:48:39","modified_gmt":"2022-06-06T01:48:39","slug":"the-arrest-heard-round-the-crypto-world-techcrunch","status":"publish","type":"post","link":"https:\/\/harchi90.com\/the-arrest-heard-round-the-crypto-world-techcrunch\/","title":{"rendered":"The arrest heard ’round the crypto world – TechCrunch"},"content":{"rendered":"
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Hey everyone, and welcome back to Chain Reaction<\/strong>.<\/p>\n

Last week, we discussed $ 4.5 billion in new crypto funds from a16z. This week, we’re talking about the arrest that has everyone in the NFT space sweating bullets.<\/p>\n

If you want to get this in you inbox every Thursday afternoon, you can subscribe on TechCrunch’s newsletter page.<\/p>\n\n

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Image Credits:<\/strong> Getty Images<\/p>\n<\/div>\n

crimes of the future<\/h2>\n

The crypto space has been moving so quickly over the past couple years that builders have generally seemed to believe existing rules didn’t apply to them. Well, after years of snails’ pace legal action, it seems US prosecutors are starting to feel it’s time to challenge that perception.<\/p>\n

This week, the US Attorney’s Office in the Southern District of New York arrested and filed charges against a former OpenSea executive who used his position to front-run NFT projects that were going to be listed on the home page of the marketplace. Members of the community discovered his actions of him by tracking his activity of him on public blockchains.<\/p>\n

I would’ve loved to rant on this during the podcast, but news broke while we were recording, so I’ll leave you with some thoughts here.<\/p>\n

The arrest was pretty much a massive shock to people in the NFT space who generally believed that Nate Chastain had acted unethically but that it couldn’t be \u201cinsider trading\u201d because NFTs weren’t securities. This is a framing that was held by many, including Chastain’s boss at OpenSea who fired him.<\/p>\n

\u201cI do think there was a misframing of it as insider trading. We don’t view NFTs as financial assets, so that does not apply. That’s a very specific term for a very specific thing, \u201dOpenSea Devin Finzer told Decrypt in September.<\/p>\n

There are an awful lot of people taking a very close reading of the SDNY press release, which states it specifically charged Chastain “with wire fraud and money laundering in connection with a scheme to commit insider trading in Non-Fungible Tokens.” They notably describe NFTs as \u201cdigital assets\u201d later in the release. Also, it’s worth reiterating that this is the DOJ – not the SEC – charging him, though it is the Office’s Securities and Commodities Fraud Task Force handling this case.<\/p>\n

Now, why don’t crypto people want NFTs to be classified as securities? Well, there’s a lot of existing regulatory guidance there, and most feel it would basically upend the industry if NFTs were unilaterally subjected to securities law; it would certainly raise the barrier of entry for creation of NFTs and curtail a lot of the experimentation happening in the space right now.<\/p>\n

Another big reason that it would be bad if NFTs are treated as securities is that it would mean an awful lot of people have been doing illegal things for an awfully long time.<\/p>\n

The NFT space made it through this latest crypto bull run without any meaningful regulation coming down on it. As NFT volumes start to show signs of slowing, there’s a fear that more regulation could be just around the corner.<\/p>\n\n

the latest pod<\/h2>\n

What’s up, it’s Anita here to give you a preview of the latest episode of our Chain Reaction podcast, where we unpack the latest web3 news, block-by-block for the crypto-curious. <\/span><\/p>\n