Former OpenSea Manager’s Conviction Tossed in NFT Trading Case

Chastain was previously found guilty of wire fraud and money laundering after he used confidential information about upcoming NFT listings to buy tokens before they appeared on the site’s homepage and then sell them at a profit.

Prosecutors had argued that Chastain’s ability to choose which NFTs were featured gave him access to company "property", which he then misused.

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However, the appeals court ruled that this kind of decision-making did not meet the legal definition of property. As a result, the jury had been given misleading instructions, which made the conviction invalid.

The ruling does not suggest that Chastain’s behavior was acceptable. Instead, it points out that if a crime was committed, it would fall under a different category, such as a breach of trust or another form of misconduct, rather than wire fraud.

The judges noted that the jury seemed unsure about whether OpenSea treated the listing information as confidential.

Another factor in the court’s decision was the exclusion of testimony about OpenSea CEO Devin Finzer. Defense attorneys had wanted to present evidence that Finzer purchased tokens, including Polygon’s MATIC, before OpenSea announced a partnership with the Polygon network.

Although Finzer had signed a confidentiality agreement, the trial court ruled this evidence was not relevant.

A German man accused of taking $2.9 million (€2.5 million) worth of cryptocurrency recently avoided criminal charges. How? Read the full story.