A New York appeals court has overturned the 2023 conviction of Nathaniel Chastain, a former product manager at OpenSea, who was accused of insider trading related to NFT listings. The court ruled that the jury was improperly instructed that Chastain’s actions regarding featured NFTs constituted the company’s property. His initial conviction for wire fraud and money laundering, which came with a three-month prison sentence, centered on his alleged use of confidential information to enrich himself through the manipulation of NFT listings. The court noted that while Mr. Chastain's behavior could still be deemed unethical, it did not meet the legal definition of property theft. As a result, the case will return to the district court for reevaluation under the corrected legal framework, which could lead to a different charge. This ruling significantly impacts perceptions of insider trading within the crypto sector, highlighting the blurred lines concerning what constitutes confidential corporate information.

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