Ex-Product Manager Challenges Insider Trading Conviction: OpenSea Insider Trading Case Takes New Turn
Summary:
Nathaniel Chastain, ex-product manager for OpenSea, is challenging his conviction for wire fraud and money laundering related to insider trading. His legal team recently filed an appeal, arguing that the U.S government failed to prove that the information related to NFTs on OpenSea constituted property. Chastain had allegedly purchased NFTs before they were highlighted on the platform and later sold them for a profit. He was convicted in May 2023, sentenced to three months in prison and fined $50,000. His lawyers have requested a new trial.
Nathaniel Chastain, ex-product manager for OpenSea, a nonfungible token (NFT) marketplace, is contesting his conviction related to insider trading, which involved charges of wire fraud and money laundering. In a legal document submitted on January 16 to the United States Court of Appeals for the Second Circuit, the legal representatives of Chastain argued for his acquittal, alleging the lack of evidence from the U.S. government that the information on NFTs on OpenSea constituted property. His attorneys stressed that the information that Chastain had used for making profits from NFTs listed on OpenSea did not possess "commercial value" for the platform and was not deemed as "protected property".
The appeal document read, "Not all confidential information is property," continuing, "…confidential information must hold commercial value for its owner… The company’s business was to earn revenue from commissions on NFT transactions on its website, not from Chastain’s strategies about which NFTs to highlight." The appeal further pointed out, "OpenSea profited from Chastain’s trading as it received commissions when he bought and sold the featured NFTs on its platform."
During his 2023 trial in the U.S. District Court for the Southern District of New York, prosecutors provided evidence asserting that Chastain was responsible for selecting the NFTs to be highlighted on the OpenSea website. Chastain had bought 45 NFTs prior to their featuring and later sold them for Ether (ETH). Consequently, in May 2023, he was found guilty of wire fraud and money laundering and was handed down a sentence of three months in prison and a $50,000 fine. However, the sentencing judge allowed him to turn himself in to authorities on November 2. The appellate filing has proposed the overturning or vacation of Chastain's conviction in favor of a new trial.
Published At
1/18/2024 7:19:12 PM
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