Cointelegraph reports that Nathaniel Chastain, the former product manager of OpenSea who was previously accused of insider trading involving NFTs, recently appealed to the court, claiming the right to be acquitted. He argued that the prosecution failed to prove that the “NFT information” displayed on OpenSea belonged to the platform and therefore should not be protected by law.
According to court documents submitted to the United States Court of Appeals for the Second Circuit on the 16th, Chastain’s legal team claimed that the investigative agency failed to prove that the “NFT-related information” on OpenSea was property and therefore he should be acquitted.
Chastain’s lawyer emphasized that Chastain profited from the NFT display information obtained from the OpenSea website, which does not have “commercial value” for the platform itself, and therefore should not be considered “protected property”. They added, “OpenSea’s business model and revenue generation come from transaction fees charged for NFT trades on their website, not from Chastain’s NFT display decisions.”
However, the prosecutor Damian Williams had previously expressed a firm stance, stating, “Such a ruling should send a warning to other insiders in companies that we will not tolerate insider trading in any market.”
Earlier, Chastain was charged by the US prosecution in June 2022 for utilizing his business advantage to determine the NFTs to be displayed on OpenSea’s homepage. He purchased at least 45 NFTs at a low price before their listing and then sold them at a high price through extensive promotion after the listing, making illegal profits exceeding $50,000.
Subsequently, Chastain was detained by the Federal Bureau of Investigation (FBI) and was convicted of telecommunications fraud and money laundering in May of the following year. The prosecutor in the case requested a sentence of 21 to 27 months of imprisonment for Chastain.
It is said that this case is being compared to the Coinbase product manager insider trading case that occurred in September 2022. The three defendants in that case also illegally profited by obtaining information about tokens that would be listed and made profits of up to $1.5 million.
In the end, the defendants in the Coinbase case were sentenced to 2 years of imprisonment and an equal period of supervised release, and they will serve their sentences in a federal correctional institution in New Jersey.
In the OpenSea case, Chastain was subsequently sentenced to 3 months of home confinement, a $50,000 fine, 200 hours of community service, and the forfeiture of approximately 15.98 ETH with a current value of about $39,000.
Now, Chastain’s lawyer has announced that they will file an appeal to overturn his conviction and request a retrial. If Chastain is ultimately found guilty, this case will set a precedent in the NFT field and provide a basis for future judgments in similar cases.