Ethereum NFT Marketplace OpenSea Confirms Insider Trading by Employee

An employee of OpenSea, currently the largest non-fungible token (NFT) marketplace on Ethereum (ETH), is apparently guilty of insider tradingor insider trading.

Last night, multiple users discovered that Nate Chastain, head of product at OpenSea, bought NFTs on the front page of OpenSea even before the sale actually started. He then sold them again for a profit, Twitterer Zuwu reports along with transaction data:

Because the NFTs appeared on the front page, there was a very good chance that they would appreciate in value. Oxngmi of DeFiLlama reports that this had actually been going on for a while, but it didn’t exactly make much sense. He says earnings are very low relative to Chastain’s shares in OpenSea, which he may now be risking. Also, it was easy to hide, but may have gotten “lazy:”

The OpenSea team just confirmed the allegations are true:

“This is incredibly disappointing. We want to make it clear that this behavior does not represent our values ​​as a team. We are taking this very seriously and are investigating this incident immediately and thoroughly so that we have a full understanding of the facts and additional steps we need to take.”

OpenSea also reports that they have implemented some new policies. Employees may not buy NFTs when they are promoted or use confidential information to buy NFTs.

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You might think that this is already obvious. The cryptocurrency community has therefore been criticized a lot. Normally, insider trading is prohibited on the regular trading market anyway and the crypto world is trying to build a fairer and more transparent trading market. Of course this doesn’t fit.

Chastain himself has not yet commented on the news. He admitted it (accidentally) once before:

OpenSea broke records in August when the volume on the marketplace soared and the platform took over almost the entire NFT market. The volume has fallen sharply again in recent weeks, but it is still very high.

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