DOJ Drops OpenSea NFT Insider Trading Case
The Justice Department has appealed the charges against former OpenSea executive Nathaniel Chastain on charges of wire fraud and money laundering.
U.S. prosecutors will not retry their insider-trading case against a former manager of OpenSea, a non-profit platform, after a federal appeals court overturned his conviction in July.
On Wednesday, prosecutors told Nathaniel Chastain in federal court that they had reached a delayed plea deal and will drop their charges after the deal expires in a month.
Manhattan U.S. Attorney Jay Clayton said in a letter that the decision means Chastain will serve three months in prison, including three months of an earlier sentence, and has agreed to forfeit $47,330 in 15.98 Ether (ETH) payments he allegedly made to insider traders.
Clayton wrote: “The interest of the United States would be better served by delaying the prosecution of this case and not retrying the case.”
A jury in 2023 convicted Chastain of wire fraud and money laundering, and prosecutors charged that he used his knowledge to buy NFTs displayed on OpenSea's website and later sell them after their prices skyrocketed.
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Chastain was sentenced to three months in prison and a $50,000 fine, but a federal appeals court overturned the conviction in July, ruling that the jury was improperly instructed and that the NFT home page information was not property under federal wire fraud laws other than commercial value.
The case marks the first digital asset insider trading case in U.S. history, and crypto proponents cited the overturned ruling as a move to create clearer legislation to define how digital assets fit under existing laws.
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Chastain will not be supervised by US Pretrial Services and may apply to repay the $50,000 fine and $200 special assessment he paid for his first conviction in May 2023.
Chastain's case adds to a growing list of crypto-related investigations, indictments and lawsuits that the Justice Department and regulators have launched under the Trump administration, which has vowed to deregulate the sector.
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