NEW YORK, July 31 (Reuters) - A divided federal appeals court on Thursday overturned the fraud conviction of a former product manager at OpenSea, the world's largest marketplace for non-fungible tokens, in what prosecutors called the first insider trading case involving digital assets.
The 2nd U.S. Circuit Court of Appeals in Manhattan agreed with Nathaniel Chastain that erroneous jury instructions could have led to his conviction merely for acting unethically, by misusing information that had no real value to his employer.
Chastain, a 35-year-old Massachusetts native, had been appealing his May 2023 wire fraud and money laundering conviction and three-month prison sentence.
It isn't clear whether prosecutors plan to retry Chastain following Thursday's 2-1 decision.
A spokesman for U.S. Attorney Jay Clayton in Manhattan, whose predecessor prosecuted Chastain, did not immediately respond to requests for comment.
Non-fungible tokens, or NFTs, are unique digital assets, reflecting ownership of files such as artwork, other images, videos and text, and recorded on a blockchain.