Appeals Court Overturns OpenSea NFT Convictions

A U.S. federal appeals court has overturned both the wire fraud and money laundering convictions of Nathaniel Chastain, a former product manager at OpenSea, in the first insider trading case involving digital assets. The Second Circuit Court ruled that the jury in Chastain’s trial received improper instructions, allowing a conviction based on unethical conduct rather than the misappropriation of a traditional property interest required by federal fraud law. Prosecutors alleged Chastain used confidential information about upcoming NFT features on OpenSea’s homepage for personal profit. The appellate court determined that his actions, while potentially unethical, did not necessarily amount to wire fraud under existing law. Chastain’s legal team welcomed the decision, calling the case a miscarriage of justice. This ruling could influence how insider trading laws are interpreted for digital assets in the future.