Nathaniel Chastain, the former OpenSea employee accused of profiting from advance knowledge of NFT listings, has had his conviction thrown out by a U.S. federal appeals court.
The ruling challenges how courts define “property” in the context of digital assets and insider information.
Chastain had been found guilty of wire fraud and money laundering in 2023 after buying NFTs he knew would soon be featured on OpenSea’s homepage. He served a brief prison sentence and was fined $50,000. But in a new decision, the Second Circuit said the jury received flawed guidance, potentially convicting him for unethical behavior rather than actual misappropriation of property—a requirement under federal fraud laws.
The court sided with Chastain’s argument that confidential business plans aren’t automatically considered property under the law. He also argued that OpenSea benefited from his trades, collecting standard platform fees like any other user.
This case was one of the first to test how insider trading rules apply to NFTs, a space that exploded during the 2021–2022 crypto bull run. OpenSea, once the dominant NFT platform with $5 billion in monthly trading, has seen volumes drop to under $100 million. Yet the platform still claims nearly $1 billion in total revenue to date.
The ruling could have lasting implications for how regulators and prosecutors approach insider activity in decentralized markets.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/former-opensea-managers-insider-trading-conviction-reversed/