This Week in the Metaverse: A former OpenSea employee is convicted, but a different court case could shed more light on the future of NFTs

The first “insider trading” case dealing with NFTs finally wrapped up this week. After two days of deliberations, former OpenSea product manager Nate Chastain was convicted on two counts—one of wire fraud, one of money laundering.

Chastain was accused of using information about which collections were going to be listed on OpenSea’s homepage to make trades in which he—and two others—personally pocketed thousands of dollars. He faces a maximum of 40 years in prison, although he’ll likely receive less. 

The Justice Department and the U.S. attorney for the Southern District of New York, Damian Williams, said Chastian’s actions were a classic case of fraud. The defense, on the contrary, claimed that it wasn’t so clear and that the wire fraud charge in particular raised questions on what constitutes company property, and whether Chastain actually violated any company rules. 

The case could have far-reaching implications, not just in cases about NFTs but in non-financial cases. The defense even argued that the decision could criminalize disputes between employees and employers, although that is yet to be seen.

Looking forward, perhaps the most interesting NFTs-related case is a class action suit against Dapper Labs, the creator of NBA Top Shot.

The plaintiffs claim Dapper Labs’ NFT “Moments,” which portray different NBA players, are securities. Earlier this year, a judge said the plaintiffs argued this point sufficiently enough for the case to go forward and be settled in court. Unlike Chastain’s case, the Dapper Labs case is addressing the question of whether NFTs are securities, which so far hasn’t been explicitly answered by the Securities and Exchange Commission.

In the broader NFT market, we saw newfound excitement in Solana NFTs due to Mad Lads and some buzz around the Blur marketplace’s new borrowing and lending product, as well as the equivalent of buy-now, pay-later for digital assets.

Meanwhile, a report by Dapp Radar was less upbeat, noting that NFT trading volume dropped 19% in April to $1.4 billion. The number of traders also hit a 20-month low last month at 364,911. Food for thought.

In other news

The London-based Evening Standard newspaper partnered with digital artist Trevor Jones to launch a free collection of commemorative Ethereum NFTs, called “The Oath,” to celebrate the coronation of King Charles III on Saturday, Decrypt reported. They can be claimed on the crypto exchange Nifty Gateway or by using a QR code that’s to be printed in the newspaper and plastered on billboards along Oxford Street in London. The artwork in the NFT by Jones depicts Saint Edward’s Crown, worn by Queen Elizabeth II in her 1953 coronation. The NFTs won’t be delivered to wallets until May 7.

Jack Hill—POOL/AFP via Getty Images

Sotheby’s launched a peer-to-peer secondary market for NFT art and collectibles on its marketplace, Sotheby’s Metaverse, this week. NFTs on the platform will be curated by specialists from the auction house who will provide guidance and context for each work. The platform will allow people to transact with each other using the Ethereum and Polygon blockchains, like they do on other NFT exchanges like OpenSea. Notably, every secondary sale will include royalties—and artists will set their own rates. Users of the secondary marketplace can buy and sell works from 13 leading digital artists: Tyler Hobbs, Claire Silver, XCOPY, Diana Sinclair, IX Shells, Sarah Zucker, Refik Anadol, Sofia Crespo, Sam Spratt, Pindar van Arman, Osinachi, Hackatao, and Sebastião Salgado.

Courtesy of Sotheby’s

Sports Illustrated is jumping into NFT tickets through a partnership between its ticketing site, SI Tickets, and MetaMask crypto wallet creator Consensys. SI Tickets launched a platform this week called Box Office by SI Tickets that provides NFT ticket for events of any size across sports, health, fitness, concerts, and comedy. ​​SI Tickets and ConsenSys are also introducing a “super ticket” that’s meant to enhance engagement opportunities between hosts and attendees before, during, and after events.