Ex-OpenSea manager withdraws bail application, to surrender for 3-month sentence

Former OpenSea manager Nathaniel “Nate” Chastain has withdrawn his application for bail pending appeal and has agreed to surrender to serve his three-month sentence in November.

Chastain was charged by U.S. prosecutors with insider trading in June 2022. The Department of Justice (DOJ) alleged that he used confidential information about non-fungible tokens (NFTs) that would list on OpenSea to front-run customers.

Whether you’re dealing with traditional assets or new asset classes like ‘crypto,’ financial laws apply, DOJ pronounced in what was its first insider trading enforcement case relating to NFTs.

Chastain’s legal team attempted to get him acquitted on technicalities, claiming that insider trading charges only apply to securities and commodities, and NFTs are neither. Additionally, he argued that he was never explicitly ordered not to use the confidential information he knew about the listings.

The Southern District of New York wasn’t having it, and in May 2023, Chastain was convicted on wire fraud and money laundering charges, and was sentenced to three months behind bars, another three months of home confinement, and up to three years of supervised release.

In a filing, Chastain’s lawyer confirmed that he had decided to withdraw his application for bail pending appeal.

“Accordingly, pursuant to the Court’s Order at the August 22, 2023, sentencing, and the Judgment in this matter, Mr. Chastain will self-surrender by 2:00 p.m. on November 2, 2023, to begin serving his sentence while his appeal is pending.”

Chastain is one of many ‘crypto bros’ who have found themselves in trouble for assuming that financial laws don’t extend to digital assets. This group has held onto the widely-held deception that Satoshi Nakamoto created Bitcoin to be anti-establishment.

Satoshi has, on several occasions, warned that Bitcoin is meant to work within the confines of the law and that authorities would catch up with these criminals, and he’s finally being vindicated.

In a similar case, a former Coinbase (NASDAQ: COIN) manager argued that he couldn’t be prosecuted for insider trading as digital assets are neither securities nor commodities. His argument was dismissed, and he’s now serving a two-year prison sentence.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of group—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.