Home CryptocurrencyBitcoin Former OpenSea manager appeals conviction, claiming NFT information is not “property”

Former OpenSea manager appeals conviction, claiming NFT information is not “property”

by SuperiorInvest

Nathaniel Chastain, a former product manager at non-fungible token (NFT) marketplace OpenSea, has appealed his conviction for wire fraud and money laundering related to insider trading.

In a Jan. 16 filing with the U.S. Court of Appeals for the Second Circuit, Chastain’s legal team asserted that the former product manager was entitled to an acquittal because the U.S. government failed to prove that Information related to NFTs on OpenSea will qualify as property. According to his attorneys, the information he used to profit from the NFTs listed on OpenSea’s website had “no commercial value” to the platform and was not considered “protected property.”

“Not all confidential information is proprietary,” the appeal brief said. “[C]Confidential information must have commercial value for its owner. […] “The company’s business model was to earn revenue from commissions on NFT transactions made on its website, not to monetize Chastain’s ideas about which NFTs to feature.”

The presentation added:

“OpenSea made money from Chastain’s trades, because she earned commissions when she used their platform to buy and sell the featured NFTs.”

Source: PACER

Related: First version of Mickey Mouse becomes top NFT on OpenSea after copyright expires

During her 2023 trial in the US District Court for the Southern District of New York, prosecutors presented evidence that Chastain had the authority to choose which NFTs would appear on OpenSea’s website. He bought 45 NFTs before they appeared and then resold them for Ether (ETH).

In May 2023, Chastain was found guilty of wire fraud and money laundering. He was subsequently sentenced to three months in prison and a $50,000 fine, and a judge allowed him to wait until November 2 to surrender to authorities. The appeal filing requested that Chastain’s conviction be overturned or vacated in lieu of a new trial.

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