Money laundering is illegal itself without requiring other illegal activity at all, the act of hiding sources and destinations is itself against the law. Likewise wire fraud.
And NFTs are securities, or at least this is the argument. The laws barring insider trading apply to securities in general, individual types of securities need not be enumerated in each law. Collectables are not securities, they are the actual thing and thus not covered.
In this case, the money-laundering statute with which Chastain is being charged -- 18 USC 1956(a)(1)(B)(i) -- does require that the transaction was originally "designed in whole or in part" for a purpose that is itself illegal, namely the wire fraud.
The wire fraud indictment, in turn, seems to hinge on the allegations that Chastain used "false and fraudulent pretenses, representations and promises" (namely, using anonymous accounts to flip the NFTs) and acted "in violation of the duties he owed to OpenSea" (namely, by using OpenSea's confidential data for personal gain, contrary to an agreement he signed).
I’m under the impression that as an employee also you don’t have to sign a specific agreement not to use company insider information for personal gain, but having signed that agreement strengthens the case that the accused knew what he was doing was illegal.
NFTs are not securities any more than Furbies or Cabbage Patch dolls or baseball cards or Magic: The Gathering limited edition packs.
This argument doesn't hold water because the Howey test is very clear about what defines a security and art based NFTs are no such thing. Just because some people speculate on a commodity going higher in price does not make it a security.
He is not being charged with insider trading. There is no argument even being put forth by the DOJ that he violated securities laws. He's being charged with wire fraud and money laundering.
And NFTs are securities, or at least this is the argument. The laws barring insider trading apply to securities in general, individual types of securities need not be enumerated in each law. Collectables are not securities, they are the actual thing and thus not covered.