US federal prosecutors have decided to abandon the insider trading case against a former manager at a major nonfungible token marketplace, closing a landmark legal battle that once set precedent for digital asset enforcement. The move follows a successful appeal that overturned earlier convictions tied to NFT trading activity.
Deferred Prosecution Agreement Ends Case
Prosecutors informed a federal court in Manhattan that they have entered into a deferred prosecution agreement with Nathaniel Chastain, a former platform employee previously convicted of wire fraud and money laundering. Under the agreement, the case will be formally dismissed after one month, citing that Chastain has already served three months in prison and accepted the forfeiture of 15.98 Ether, valued at roughly $47,000.
Authorities stated that retrying the case would not serve the public interest, given the circumstances and penalties already imposed.
In July, a federal appeals court overturned the original conviction, ruling that NFT homepage placement data does not qualify as property under existing wire fraud statutes. The court also found that the jury received flawed legal instructions, undermining the verdict.
The case was the first NFT-related insider trading prosecution in US history. Its dismissal is now fueling calls for clearer digital asset legislation, as regulators and lawmakers reassess how existing laws apply to emerging blockchain-based markets.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.