According to OpenSea, allegations of insider trading in the NFT have been confirmed in relation to the company’s head of product lead.
Uncovering nonfungible tokens that he had purchased and displaying them on the homepage of the popular NFT marketplace, an OpenSea executive has been exposed. The executive apparently did this to enable him to sell the art pieces for a quick profit.
In this case, Nate Chastain, who works as the head of product at OpenSea, is accused of using burner wallets to purchase NFTs, which were then placed on the front page of the platform — where they would attract the most attention — before selling them for profit.
The entire ordeal was documented by a Reddit user who posted the transaction information on the site.
One of the NFTs in question is a member of the Dailydust Collection on OpenSea, whereas the other is not. The “Spectrum Of A Ramenfication Theory” was purchased by Chastain on Tuesday for 0.25 Ether (ETH), and it was sold for 1.5 ETH a few hours later, according to the blockchain.
It is noteworthy that the deal was completed after the NFT was featured on the top page of the newspaper.
An anonymous Twitter user claimed that Chastain has been flipping front-page NFTs for some time in a post that occurred on Tuesday.
Found a place to upload the files that has a 30day or 250 download limit! These 2 files were sent to me anonymously with sketchy wallet activity from people looking into it before me.https://t.co/fQQqt7sjdb— Zuwu (@ZuwuTV) September 15, 2021
According to the Chinese cryptocurrency news outlet 8BTC News, the OpenSea executive gained 18.875 ETH through insider trading of 11 NFTs.
How much #opensea product lead earned through insider trading. Data collected by our friend @BlockBeatsChina https://t.co/lJYOdQ8t0I pic.twitter.com/UQpRfj1LjR— 8BTCnews (@btcinchina) September 15, 2021
The claims were confirmed by OpenSea in a blog post that was published on Wednesday. In a blog post, the company stated, “Yesterday we learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly,”
“This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough review of this incident so that we have a full understanding of the facts and additional steps we need to take.”
Employees of OpenSea, which processed $4 billion in sales in August alone, have been barred from purchasing and selling collections that are featured on the platform, according to the company. They are also barred from profiting from the sale of NFTs by using confidential knowledge about the products.
At the time of writing, OpenSea had not provided any information about Chastain’s job status with the company.