Opensea, the world’s largest NFT marketplace, announced that one of its senior executives was guilty of insider trading and used internal information to make big profits from non-fungible tokens.
The popular marketplace stated that Nate Chastain, the product manager at Opensea, used internal information to purchase NFTs that is about to be released on the company’s home page and is likely to increase in value.
On Wednesday September 15th, OpenSea CEO Devin Finzer tweeted: “Yesterday we learned that one of our employees had bought items that he knew would be displayed on our front page before they appear publicly there. That is incredibly disappointing. We want to make it clear that this behavior is not in line with our values as a team. We take this very seriously and are conducting an immediate and thorough review of this incident so that we fully understand the facts and the additional steps we need to take. “
Opensea is investigating Chastain’s secret deals after allegations were made against him last night when community members publicly accused the employee of buying NFTs to be displayed on the front page of the company’s website before listing them publicly.
Yesterday, a Twitter user called “ZuwuTV” highlighted a tweet saying that Chastain operated “secret wallets” that the NFTs bought on the platform’s front page before they were “tagged” and later because of them Exposure sold at a profit once the price went up.
Other Twitter users also accused Chastain of using a secret Ethereum wallet to snag the website’s front page NFTs prior to their public release.
Some users mentioned a tweet from Chastain in August in which he appeared to admit that he had bought an NFT from artist Arya Mularama prior to public listing. “I just wanted to get one of these before they all went away,” Chastain tweeted during the time.
Using tools like Twitter’s advanced search function and Wayback Machine, ZuwuTV and other users showed that Chastain likely purchased NFTs that are supposed to be featured on the OpenSea website as NFTs.
Seven months ago, Chastain bought CryptoPunk # 3501 for 26.98 Ether (valued at $ 92,000 at today’s prices), according to Opensea data. Since this NFT identified its Ethereum address, users could keep track of the money trail flowing on Chastain’s publicly known account as the Ethereum blockchain transparently and persistently records all transactions in a public ledger.
Opensea has therefore introduced new guidelines that state that team members are now prohibited from buying or selling collections. At the same time, they are advertised or featured on the company’s homepage and are not allowed to use any confidential information to buy or sell NFTs, whether or not they are available on the company’s platform.
Growing demand for NFTs
Opensea was founded in 2017 and is the largest peer-to-peer marketplace for crypto assets (non-fungible tokens), collectibles, game items and other assets supported by a blockchain. The company operates in a brand new market but is growing rapidly. The company has had over $ 200 million in trading volume on its platform and over 12 million assets listed on the marketplace since its inception.
In August, Opensea recorded $ 3.4 billion in transactions on Ethereum, more than ten times its value in July.
Data indicates an unprecedented interest in NFTs – digital assets that can represent objects that range from virtual real estate to video files to works of art. Rising demand and media attention has driven the prices of NFT collections soar, and the buying frenzy of such digital assets has also increased the prices of Solana and Ether and other smart contract blockchains where non-fungible tokens can be created.
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