US prosecutors have closed the landmark insider trading case against Nathaniel Chastain, a former manager at OpenSea, the prominent NFT marketplace. This conclusion follows a federal appeals court’s decision earlier this year to overturn Chastain’s conviction, marking a significant juncture in the application of traditional financial crime laws to the burgeoning field of digital assets.
On Wednesday, prosecutors formally notified a Manhattan federal court of their decision to enter into a deferred prosecution agreement with Chastain, effectively ending the case once the agreement expires in about a month. As part of this deal, Chastain will not contest the forfeiture of 15.98 Ethereum, valued around $47,000, which he allegedly earned through his insider trading activities.
Manhattan US Attorney Jay Clayton highlighted that several factors influenced this decision, including Chastain’s prior punishment, which involved serving three months of imprisonment and incurring a $50,000 fine following his 2023 conviction for wire fraud and money laundering. Clayton indicated that the move to defer prosecution aligns with the best interests of the United States.
Initially, the case attracted considerable attention from both legal experts and cryptocurrency stakeholders, as prosecutors accused Chastain of leveraging his position at OpenSea to purchase NFTs shortly before they were highlighted on the platform’s homepage, subsequently selling them for a profit once their visibility increased. This case was pivotal in testing the applicability of existing financial laws in the context of digital assets, being termed the first insider trading case involving NFTs.
However, the narrative shifted significantly when the appeals court ruled that jurors had been provided with flawed instructions and determined that the data regarding featured NFTs did not constitute “property” with commercial value, as defined by federal wire fraud statutes. This ruling was welcomed by cryptocurrency advocates, who argued it underscored the urgent need for more defined legislation regarding digital assets within traditional legal frameworks.
Alongside the developments in Chastain’s case, the enforcement actions regarding cryptocurrency by the US Securities and Exchange Commission (SEC) saw a substantial decrease in 2025. A report from Cornerstone Research revealed that the SEC initiated just 13 crypto-related enforcement actions, a drastic drop from 33 in 2024, equating to a roughly 60% decrease—the lowest level of enforcement since 2017.
This reduction in enforcement actions coincides with the leadership change at the SEC, following Paul Atkins’ appointment as chair. Notably, out of the 13 actions in 2025, five predated the departure of former chair Gary Gensler in January, with the remaining eight occurring under Atkins’ guidance. The recent cases have primarily concentrated on allegations of fraud rather than broader registration or market structure violations.
This shift in focus is significant for the cryptocurrency industry, which has been navigating what many called “regulation by enforcement” for years. Under Atkins, the SEC appears to be prioritizing cases demonstrating clear investor harm, adopting a more straightforward approach to litigation.
Cornerstone’s analysis indicated that while the number of new enforcement actions dwindled, 29 crypto-related actions were concluded in 2025, including seven dismissals under Atkins’ leadership. Financial penalties imposed during this period amounted to $142 million, notably falling below 3% of the penalties faced in 2024.
Robert Letson, a principal at Cornerstone Research, suggested that this evolution in enforcement signifies a transition in the SEC’s oversight of digital assets. Legal observers assert that the emerging trend indicates a future of US cryptocurrency regulation reliant less on surprise legal actions and more on systematic rulemaking, guidance, and negotiated standards.
