Court Overturns Fraud Conviction of OpenSea’s Nate Chastain

Three years after OpenSea’s former Head of Product, Nathaniel Chastain, was arrested by the Federal Bureau of Investigation (FBI) on insider trading charges, a U.S. court has overturned his conviction.

Reuters reported that the 2nd US Circuit Court of Appeals overturned Chastain's conviction as “erroneous jury instructions could have led to his conviction merely for acting unethically, by misusing information that had no real value to his employer.”

Chastain was charged in 2022 for using insider knowledge to purchase non-fungible token (NFT) collections that would be featured on OpenSea’s homepage ahead of time, and then selling them for a profit. He was convicted in May 2023.

According to The Block, Chastain claimed that OpenSea’s current CEO, Devin Finzer, acted in a similar manner by purchasing MATIC, now POL, ahead of the platform’s Polygon NFT integration, but no evidence was shared to back up this claim.

The district court did not allow Chastain to question Finzer, deeming the line of questioning and relevancy to be irrelevant, misleading, and only used to “disparage Finzer." The claims and line of questioning were barred from the courts.

Finzer did not immediately respond to The Defiant’s request for comment.

The news comes as OpenSea gears up for its long-awaited token launch, which still does not have a set date. However, the legacy NFT platform has released numerous updates surrounding its XP points system, which is presumed to determine early users’ token allocations.

Today, OpenSea announced via Discord that it will begin banning accounts that are flagged for sybil activity over the coming weeks. Such activity refers to one user operating multiple connected wallets in order to game an expected airdrop and boost their token allocations.

The NFT market is also heating up, led by CryptoPunks, which now boast a 52 ETH ($195,000) floor price. Other popular collections, such as Moonbirds, are surging as well, trading above 2 ETH after dropping as low as 0.3 ETH in 2024. The collection’s floor price reached as high as 40 ETH in the 2021 NFT bull market.