Nathaniel Chastain, the former product manager of NFT marketplace OpenSea, has appealed his conviction for wire fraud and money laundering related to insider trading.
Nathaniel Chastain, the former product manager of NFT marketplace OpenSea, has appealed his conviction for wire fraud and money laundering related to insider trading. In a January 16 filing in the United States Court of Appeals for the Second Circuit, Chastain's lawyers claim that the U.S. government failed to prove that information related to NFTs on OpenSea qualified as property. They argue that "not all confidential information is property" and that confidential information must have commercial value to its owner.
Chastain's legal team argues that the information he used to profit from NFTs featured on the OpenSea website "had no commercial value" to the platform and was not considered "protected property."
According to the brief, OpenSea's business model was to earn revenue from commissions on NFT transactions conducted on its website, not to monetize Chastain's ideas about which NFTs to feature. The filing also states that OpenSea made money from Chastain's trading because it earned commissions when he used its platform to buy and sell the featured NFTs.
During Chastain's 2023 trial in the U.S. District Court for the Southern District of New York, prosecutors presented evidence that he had the authority to choose what NFTs would be featured on the OpenSea website. He purchased 45 NFTs before they were featured and then resold them for Ether (ETH).
In May 2023, Chastain was convicted of wire fraud and money laundering and sentenced to three months in prison and a $50,000 fine. The appellate filing requests that Chastain's conviction be reversed or vacated in place of a new trial. Chastain's appeal raises important questions about the legal definition of property in the context of digital assets and NFTs.
Let us know what you loved about this article, what could be improved, or share any other feedback by filling out this short form.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
