The US Department of Justice has officially concluded its case against Nathaniel Chastain, a former executive at OpenSea, marking a significant development in the realm of non-fungible tokens (NFTs) and insider trading. After a conviction was overturned last year, prosecutors have decided against pursuing a retrial, opting instead for a one-month deferred prosecution agreement. According to a filing submitted to a Manhattan federal court, once this period concludes, all charges against Chastain will be dismissed.
Manhattan US Attorney Jay Clayton cited various factors in his decision, including Chastain’s partial completion of his original prison sentence. Chastain had already served three months in federal custody and forfeited 15.98 ETH, which was estimated at around $47,000, deemed by prosecutors to be the earnings from his unauthorized NFT trades. It is noteworthy that Chastain has agreed not to contest this forfeiture.
Clayton emphasized that concluding the prosecution at this stage serves the best interests of the United States. This decision comes in light of Chastain’s earlier conviction in May 2023, where he was found guilty of wire fraud and money laundering. Prosecutors alleged that he exploited insider knowledge regarding which NFT collections would be featured on OpenSea’s homepage to secretly buy them and then flip them for profit. Evidence indicated Chastain executed at least 15 such trades between June and September 2021, making approximately $57,000 from this scheme.
After serving his sentence, Chastain appealed his conviction. In July 2025, the Second Circuit Court of Appeals reversed the ruling, siding with Chastain’s defense team, which contended that the data he accessed did not constitute “property” as defined by federal wire fraud laws. The court concluded that the jury had been misled, convicting Chastain based on ethical violations rather than constitutionally misappropriated property of tangible value to his employer. Judge Steven Menashi stated that deceptive behavior alone does not amount to criminal fraud without a demonstrable property interest.
Following his exoneration, Chastain has been released from court supervision and is eligible to reclaim the $50,000 fine and the $200 special assessment he had paid as part of his conviction.
Initially, prosecutors also explored the possibility of holding OpenSea responsible for Chastain’s actions. However, investigations determined that the company had acted promptly to investigate the misconduct, sought Chastain’s resignation, and fully cooperated with authorities throughout the inquiry.
In a broader context, US regulatory agencies have been gradually retreating from their more aggressive crypto enforcement strategies since late 2024. This shift is attributed to changes in leadership and regulatory priorities. Notably, the Securities and Exchange Commission (SEC) concluded its yearlong investigation into OpenSea, which originated from the same circumstances that led to Chastain’s initial prosecution. After a leadership overhaul, the SEC ultimately dropped its case against OpenSea, which had issued a Wells Notice claiming that the platform was offering NFTs as unregistered securities.
