The US Department of Justice has formally closed its case against Nathaniel Chastain, the former OpenSea executive at the centre of the first insider trading prosecution involving non-fungible tokens.
Prosecutors will not pursue a retrial after his conviction was overturned last year.
In a filing submitted to a Manhattan federal court on Wednesday, prosecutors said they had reached a one-month deferred prosecution agreement with Chastain.
Once that ends, charges will be dismissed.
Manhattan US Attorney Jay Clayton, who also previously served as SEC Chair, noted in a letter to the court that the government’s decision factored in Chastain’s partial completion of his original sentence.
The former OpenSea manager served three months in federal custody and had to forfeit 15.98 ETH, valued at roughly $47,000, which prosecutors claim represented the proceeds from his NFT trades.
Chastain also agreed not to challenge that forfeiture.
According to Clayton, “the interest of the United States will be best served” by ending the prosecution at this stage, rather than seeking a retrial.
What happened?
Chastain was initially convicted in May 2023 of wire fraud and money laundering after federal prosecutors accused him of using advance knowledge of which NFT collections would be spotlighted on OpenSea’s homepage to purchase them in secret before flipping them for profit.
The jury found that Chastain used anonymous wallets and burner accounts to make at least 15 such trades between June and September 2021, earning around $57,000 from the scheme. He served his time later that year while preparing to appeal.
But in July 2025, the Second Circuit Court of Appeals reversed the conviction, siding with Chastain’s defence team, which had long argued that the NFT placement data he accessed didn’t meet the legal threshold for “property” under federal wire fraud statutes.
The appellate court ruled that the jury had been misdirected, effectively convicting Chastain for ethical lapses rather than for fraud tied to misappropriated property with clear commercial value to his employer.
Judge Steven Menashi, who was overseeing the case, concluded at the time that deceptive behaviour alone does not constitute criminal fraud without a demonstrable property interest at stake.
Chastain was later released from court supervision and is now eligible to seek the return of the $50,000 fine and $200 special assessment he paid after his 2023 conviction.
At one point, prosecutors also looked into whether OpenSea itself might be on the hook for Chastain’s conduct.
However, it later concluded that the company had acted swiftly to investigate the misconduct, requested Chastain’s resignation, and cooperated with investigators throughout.
US regulators rollback crypto enforcement cases
Since late 2024, the US regulatory agencies have steadily backed away from their most aggressive crypto cases, as they pivoted away from their regulation-by-enforcement approach under new leadership.
For instance, the Securities and Exchange Commission ended its yearlong investigation into OpenSea last year, which had stemmed from the same events.
The commission had issued a Wells Notice against OpenSea, alleging that OpenSea was offering NFTs as unregistered securities. However, after the change in agency leadership and priorities, the case was dropped.
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