In a significant development for the cryptocurrency regulatory landscape, U.S. prosecutors have formally closed the landmark insider trading case against former OpenSea manager Nathaniel Chastain. The decision not to retry the case follows a federal appeals court overturning his conviction in July 2025. Prosecutors entered a one-month deferred prosecution agreement with Chastain, after which all charges will be dismissed.
Chastain was originally convicted in May 2023 on charges of wire fraud and money laundering. Prosecutors alleged he used his position at the NFT marketplace to purchase NFTs he knew would soon be featured on OpenSea's homepage, later selling them for profit. He served three months in prison, paid a $50,000 fine, and was ordered to forfeit 15.98 Ethereum (worth roughly $47,000), which he has agreed not to contest.
The case unraveled when the Second Circuit Court of Appeals overturned the conviction, ruling that the jury instructions were flawed. The court found that the NFT homepage placement data did not constitute "property" with commercial value under federal wire fraud statutes, a decision celebrated by crypto advocates as highlighting the need for clearer digital asset legislation.
This closure coincides with a dramatic shift in U.S. regulatory posture. A new report from Cornerstone Research reveals the Securities and Exchange Commission (SEC) initiated just 13 crypto-related enforcement actions in 2025, a roughly 60% drop from 33 actions in 2024. This marks the agency's lowest level of crypto enforcement since 2017.
The enforcement decline is attributed to the leadership change at the SEC, with Chair Paul Atkins, who took over from Gary Gensler in January 2025, focusing on straightforward fraud cases rather than broad regulatory theories. Of the 13 actions in 2025, eight were initiated under Atkins, primarily targeting clear investor harm. Financial penalties imposed in 2025 totaled $142 million, less than 3% of the 2024 total.
Together, these developments signal a potential pivot in U.S. crypto oversight—away from an aggressive "regulation by enforcement" strategy and toward a more selective, framework-driven approach.
