Popular marketplace OpenSea has confirmed that an employee bought the most promising NFTs before they were published in the public domain, which is regarded as illegal insider trading.
Insider scam was exposed by Twitter user Zuwu, who suspected OpenSea that its employee, @natechastain, was buying potentially lucrative NFTs into his “secret” wallets prior to their public presentation on the first page of the site. The NFTs are then either resold or deposited in his main @natechastain wallet.
Hey @opensea why does it appear @natechastain has a few secret wallets that appears to buy your front page drops before they are listed, then sells them shortly after the front-page-hype spike for profits, and then tumbles them back to his main wallet with his punk on it?
— Zuwu (@ZuwuTV) September 14, 2021
The accusations caused a stir among NFT collectors and some of them held their own investigation
NFT-related funds flow between @natechastain wallets.
Nate Chastain is known to have NFT CryptoPunk # 3501, which he acquired about 7 months ago. Buying NFT Deanonymized Chaysten’s Crypto Wallet Address and Was Relatively Easy for Observers juxtapose
by transaction records, what exactly is he behind @natechastain, as well as identify related transactions between the main and “secret” crypto wallets.
However, not all participants in the discussion regard the event in the same way as Zuwu. Some of them believe that “it may not be entirely ethical, but they would almost certainly have done the same.” In their opinion, Chaysten was simply in a unique position because he knew which projects would almost certainly be pumped. You have to be honest, “it would be foolish not to take advantage of this.”
OpenSea responded to the NFT insider trading allegation and posted a blog post admitting that Chastain’s actions are “incredibly disappointing” and that this behavior is contrary to OpenSea’s values. The site announced the beginning of an internal investigation and analysis of the incident with the involvement of an arbitrator. It was also said that OpenSea is introducing a new employee policy:
• Members of the OpenSea team are prohibited from buying and selling NFTs while they are promoting on the site:
• Members of the OpenSea team are prohibited from using any confidential information to buy or sell any NFT, whether it is available on the OpenSea platform or not.
Much to the regret of the crypto community, this is not the first time that negative events have been associated with the popular OpenSea brand. In early September, an error in the code of the OpenSea platform resulted in the sending of 42 collectible tokens worth about $ 100,000 to the address used for the destruction of tokens. Also in September, a “fake Banksy NFT” was sold through the site for $ 338,000. Earlier, several users lost their NFT collections after contacting OpenSea’s fake NFT technical support.