Appeals court overturns Nate Chastain's conviction in OpenSea insider trading case

A US national appeals tribunal has overturned the condemnation of Nathaniel Chastain, a erstwhile OpenSea manager recovered blameworthy of ligament fraud and wealth laundering for utilizing insider accusation to commercialized non-fungible tokens.

In a Thursday decision, the Second Circuit ruled that the assemblage was improperly instructed and could person convicted Chastain for unethical behaviour alternatively than misappropriating a accepted spot interest, a request nether national fraud statutes.

Source: US Court of Appeals for the Second Circuit

Chastain was initially charged with insider trading successful June 2022, tied to OpenSea NFT collectibles helium bought and sold the erstwhile year. In 2023, helium was convicted of ligament fraud and wealth laundering, receiving a three-month situation condemnation and a $50,000 fine.

As Cointelegraph reported, Chastain appealed the condemnation successful aboriginal 2024, arguing that NFT-related accusation does not suffice arsenic protected property.

“Not each confidential accusation is property,” Chastain’s entreaty stated, adding: “OpenSea made wealth from Chastain’s trading, due to the fact that it earned commissions erstwhile helium utilized its level to bargain and merchantability the featured NFTs.”

OpenSea is the world’s largest NFT marketplace, with much than $40 cardinal successful cumulative trading volumes, according to Dune. The marketplace roseate to prominence during the 2021-2022 NFT boom, with monthly trading volumes reaching $5 cardinal successful January 2022.

Since that peak, OpenSea’s trading volumes person dropped significantly, mirroring the broader diminution successful NFT marketplace interest. In June, trading volumes connected the marketplace were astir $82 million.

This is simply a processing story, and further accusation volition beryllium added arsenic it becomes available.