Nathaniel Chastain, the former product manager of the nonfungible token (NFT) marketplace OpenSea, has launched an appeal against his conviction for wire fraud and money laundering related to insider trading.
Chastain’s legal team submitted a filing to the United States Court of Appeals for the Second Circuit on January 16, arguing that he should be acquitted because the U.S. government failed to demonstrate that the information concerning NFTs on the OpenSea platform qualified as property.
According to his lawyers, this information lacked commercial value to the platform and did not fall under the category of “protected property.”
The appellate brief emphasized that not all confidential information could be considered property and that confidential information must possess commercial value to its owner.
It clarified that OpenSea’s primary revenue source was commissions earned from NFT transactions on its website, rather than monetizing Chastain’s ideas about which NFTs to feature.
The filing further pointed out that OpenSea benefited from Chastain’s trading activities, as the platform earned commissions when he utilized it for purchasing and selling the featured NFTs.
During his 2023 trial in the U.S. District Court for the Southern District of New York, prosecutors presented evidence to establish that Chastain had the authority to select the NFTs to be featured on the OpenSea website.
READ MORE: Launch of Bybit Web3 Swap Accelerates DeFi Revolution
He had acquired 45 NFTs before their inclusion and subsequently resold them for Ether.
In May 2023, Chastain was found guilty of wire fraud and money laundering, resulting in a three-month prison sentence and a $50,000 fine.
The judge granted him until November 2 to surrender himself to authorities. The appellate filing now requests that Chastain’s conviction be overturned or replaced with a new trial.
Chastain’s appeal centers on the crucial argument that the information he used for insider trading did not constitute protected property, challenging the foundation of his conviction.
The outcome of this appeal could have broader implications for the legal treatment of insider trading in the context of NFTs and digital assets.
Discover the Crypto Intelligence Blockchain Council
