Former OpenSea manager appeals conviction claiming NFT info isn’t ‘property’

Nathaniel Chastain was found guilty by a jury in May 2023 of wire fraud and money laundering in connection with his knowledge of which NFTs will be highlighted on the OpenSea website. The nonfungible token (NFT) marketplace OpenSea’s former product manager, Nathaniel Chastain, has filed an appeal against his conviction for wire fraud and money laundering associated with insider trading.

Chastain’s legal team submitted a plea for acquittal to the United States Court of Appeals for the Second Circuit on January 16. Their argument centered on the contention that the U.S. government lacked the capability to substantiate the categorization of information regarding NFTs on OpenSea as established property. Chastain’s attorneys asserted that the data utilized by him for NFT profit generation, visible on the OpenSea website, held no commercial significance for the platform and did not fall under the classification of “protected property.”

The appeal stated, “Not all confidential information is property.” “Confidential information must be valuable to its owner commercially […] The company didn’t want to profit from Chastain’s recommendations on which NFTs to highlight; instead, it wanted to make money from commissions on NFT transactions made on its website.

The document further stated:

“OpenSea made money from Chastain’s trading because it earned commissions when he used its platform to buy and sell the featured NFTs.”

Legal Proceedings and Conviction of the Former Manager of OpenSea

During Chastain’s trial in the United States District Court for the Southern District of New York, prosecutors presented evidence indicating that he had the authority to determine which NFTs would displayed on the OpenSea website. He purchased 45 NFTs before their featuring and subsequently sold them for Ether.

In the month of May in 2023, Chastain pronounced guilty of wire fraud and money laundering charges. Subsequently, a judge deliberated on the sentence, deciding to confine him to three months in prison and levy a fine of $50,000. Chastain granted a window until November 2 to voluntarily surrender to law enforcement authorities. The filing made for the appellate process specifically directed towards seeking the overturning or vacation of Chastain’s conviction, rather than pursuing a fresh trial.