U.S. appeals court overturns former employee’s convictions OpenSea Nathaniel Chastain for fraud and money laundering. The agency cited inconsistencies over whether the information was NFT property, and partially agreed with Chastain’s arguments.
The defendant argues that the district court erred by telling the jury they could find him guilty of theft of property. OpenSea, if he misappropriated an intangible asset unrelated to traditional property rights. He argues that error biased the jury’s decision. And we agree, the judges said.
Chastain was indicted in June 2022 after allegedly using confidential information about what NFT will be presented on the main page OpenSeato make money. Prosecutors say he secretly bought dozens NFT shortly before, and then sold them at a profit of two to five times the original price.
Chastain, former head of trading development NFT-sites OpenSea, was convicted in May 2023 in what prosecutors called «the first-ever digital asset insider trading scheme.» In August 2023, Chastain was sentenced to three months in prison and three years probation.
In the circumstances, we cannot say that the jury would have reached the same verdict if it had been properly explained to them that fraud involves misappropriation of property, and not unprofessional conduct of business, the judges said.