US appeals court overturns fraud conviction of former OpenSea product manager

PANews reported on July 31st that, according to The Block, the U.S. Court of Appeals for the Second Circuit overturned the fraud and money laundering conviction of former OpenSea product manager Nathaniel Chastain on Thursday, citing a dispute over whether the NFT information involved in the case constituted property. The judges partially agreed with Chastain's appeal, stating that the district court erred in instructing the jury, informing Chastain that he could be convicted of property fraud against OpenSea if he misappropriated intangible interests unrelated to traditional property rights, a mistake that may have affected the verdict. In June 2022, Chastain was accused of using confidential information to secretly purchase dozens of NFTs before they were listed on the OpenSea platform, later selling them at a profit of two to five times the original price. The judges expressed uncertainty as to whether the jury would have reached the same verdict if the jury had been properly instructed (fraud requires misappropriation of property rights). The judges also noted that Chastain accused OpenSea founder Devin Finzer of purchasing MATIC tokens before OpenSea announced it would integrate its associated blockchain into its NFT platform. "Chastain believes that evidence that Finzer 'used similar company information for personal gain' will demonstrate that the co-founder 'did not believe that company policy prohibited officers or employees from using similar company information for personal gain,'" Thursday's ruling said.