If a trial proceeds, Nate Chastain's legal team argue that any reference to the term "insider trading" would be "inflammatory" and "prejudicial."
A former product manager at OpenSea has asked a judge to ensure that prosecutors are banned from using the phrase "insider trading" as the case continues.
Nate Chastain has been accused of "using confidential information about what NFTs were going to be featured on OpenSea's homepage for his personal financial gain."
Since charges were brought against him, his lawyers have argued that insider trading was impossible to achieve because NFTs "are neither securities nor commodities."
If a trial proceeds, Chastain's legal team argue that any reference to the term "insider trading" would be "inflammatory" and "prejudicial."
In a memorandum filed on Sept. 30, the defendant's counsel wrote:
"Insider trading enforcement is a hot-button topic in the United States, as high-profile trials and investigations are regularly presented as front page news. Of course, the government is aware of this and its provocative use of the phrase “insider trading” has unsurprisingly garnered significant media attention here."
In separate developments, Chastain is also seeking for certain evidence obtained by the government to be suppressed because it violates his constitutional rights.
It's claimed that, when the FBI searched his home in September 2021, he wasn't read his Miranda rights and was asked to give the password to his cell phone.
Chastain provided that information — but it's claimed that, when the government had applied for the search warrant, the judge had been told that agents wouldn't ask for his phone's password. Another memorandum adds:
"To make matters worse, the government then used the illegally obtained password to access the digital contents of the defendant’s cell phone."
His legal team described the government's violation of his Fifth Amendment right against self-incrimination as "egregious" — and any evidence obtained from the cell phone should not be admitted "to deter future instances of similar misconduct."
Previously, the government has said that it stood by its decision to describe the charges against Nate Chastain as "insider trading," adding:
"The indictment alleges Chastain improperly used confidential, nonpublic [or 'inside'] information about an asset to buy and then sell [or 'trade'] that asset on a public market."
Back in August, Chastain filed a motion to have the case dismissed.
He has been charged with one count of wire fraud and one count of money laundering — with each count carrying a maximum sentence of 20 years behind bars.
Between June and September 2021, it is alleged that he "secretly" purchased crypto collectibles shortly before they were given prominence on the NFT marketplace's homepage.
Estimates suggest the alleged transactions generated 19 ETH, worth about $26,000 at current market rates — with "profits of two to five times his initial purchase price."
Another argument put forward by Chastain suggests that OpenSea was not deprived because of his alleged actions, as the marketplace was still able to collect fees whenever NFTs were bought or sold.
His legal team is also pushing to subpoena the company.