OpenSea confirms executive used insider trading to buy NFTs
The non-fungible token (NFT) space has grown massively in recent months, but there might be some dirty games going on behind the scenes
OpenSea, the largest NFT marketplace in the world, has confirmed that an executive of the company has been using insider information to buy NFTs. The platform confirmed this yesterday after some Twitter users accused the executive of buying items ahead of the general release.
Nate Chastain, the head of product at OpenSea, was accused of leveraging insider information to trade NFTs. He was accused of using a secret Ethereum wallet to purchase OpenSea’s front-page NFT drops before general release.
The Twitter user further claimed that Chastain was selling the NFTs immediately after the front-page hype to make profits. OpenSea made a statement yesterday confirming the actions of Chastain.
In a blog post published yesterday, OpenSea said Chastain’s actions were very disappointing, and they want to make it clear that his behaviour doesn’t represent the values of the company. “We are taking this very seriously and are conducting an immediate and thorough third party review of this incident so that we have a full understanding of the facts and additional steps we need to take,” OpenSea added.
The platform said it is implementing new policies that would curb such actions in the future. Henceforth, OpenSea members have been banned from buying and selling from collections or creators while the platform is featuring or promoting them.
Furthermore, OpenSea team members are also banned from using confidential information to buy or sell any NFTs available on the OpenSea platform or other NFT marketplaces. Chastain is the holder of a few rare NFTs, including CryptoPunk #3501, which he bought for 26.98 ether (about $92,000 at the current price) a few months ago.
OpenSea is the leading NFT marketplace in the world, accounting for more than half of the trading volume in the sector. Although crypto exchanges like Binance and FTX have launched their own NFT marketplaces, crypto enthusiasts have flocked to the traditional NFT marketplaces such as OpenSea and Rarible to develop, launch, sell and buy non-fungible tokens.