Jailed OpenSea Executive Appeals Conviction

By Philip Maina

5 hours agoFri Jan 19 2024 13:10:00

Jailed-OpenSea-Executive-Appeals-Conviction

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  • Former OpenSea executive Nathaniel Chastain has asked a U.S. court to overturn his conviction
  • Chastain argues that his conviction was based on the incorrect assumption that NFTs are a form of property
  • Chastain was found guilty of fraud and money laundering crimes

Former OpenSea product manager Nathaniel Chastain is back in court to fight for his freedom after being convicted of fraud and money laundering on insider trading charges. Chastain has appealed his conviction saying it assumed that NFTs are property and that the insider information that gave him an edge over other NFT traders on the exchange wasn’t of significant importance to the NFT marketplace. Chastain isn’t, however, refuting that he benefited from the insider information, something that stains his appeal.

OpenSea Also Benefited

According to Chastain’s legal team, the insider information he used to profit off collectibles on the marketplace wasn’t marked as “protected property” by OpenSea and as such wasn’t OpenSea’s property.

The team also argue that despite the product manager profiting from confidential information, the marketplace’s “business model” enabled the exchange to profit from Chastain’s actions through trading commissions. The team has asked the court to offer Chastain a fresh trial.

In 2023, Chastain was accused of using insider information to purchase 45 digital collectibles before they were featured on the platform and later reselling them after their price appreciated after being featured. He was given until November 2, 2023 to take himself to the police to serve his three-months’ prison time.

Insider Trading or Not?

OpenSea’s CEO Devin Finzer downplayed Chastain’s behavior, saying that it’s inappropriate to label it insider trading since it doesn’t involve financial assets.

Chastain’s appeal comes eight months after a Coinbase insider trader, Ishan Wahi, has sentenced to two years in prison. Wahi was accused of using his position in the crypto exchange to purchase tokens before they were listed and selling them after listing, making a profit.

With Chastain not refuting that he used his position to benefit from NFT trading on OpenSea, it’s to be seen whether the court will consider his new argument as enough ground for appeal.