Ex-OpenSea Employee Cleared in First NFT Insider Trading Appeal — Here’s What Changed

Key Points

1. Nathaniel Chastain, a former OpenSea employee, was convicted in 2023 for using insider knowledge to profit from NFT trades, but the conviction was overturned on appeal.

2. The appeals court ruled that the NFT data Chastain used was not monetized by OpenSea and lacked tangible value, thus not qualifying as property under wire fraud laws.

3. The court found that the jury received flawed instructions, which 'tainted the verdict beyond repair,' leading to the reversal of the conviction.

4. The ruling may force the US government to reconsider its approach to prosecuting crypto-related offenses, particularly in the NFT market.

5. OpenSea itself faced regulatory scrutiny in the past, including an SEC investigation that closed without action in February 2025.