OpenSea’s senior employee was caught inside trading NFTs. He was then dropped from the platform and sold them at a profit. The project soon published a blog posting admitting to the wrongdoing.
Product Lead had “Prior Knowledge” about NFTs Drops
Twitter users accused Nate Chastain (Head of Product at OpenSea) of using secret wallets for ETH burners to purchase NFTs, before they were loaded on the front page. The mistake of sending the profits directly to his public address was what gave him away. Twitter user who discovered the transactions first revealed that Chastain had been buying NFTs for some time.
I found a location to upload the files with a limit of 250 or 30 days. These 2 files were sent to me anonymously with sketchy wallet activity from people looking into it before me.https://t.co/fQQqt7sjdb
(@ZuwuTV) September 15, 2021
According to BlockBeats China data, he made 19 ETH total – approximately 66,911 US dollars.
OpenSea Executive: Sending Profits To His Account
OpenSea data shows that Chastain is CryptoPunk #3501’s owner. It was purchased for 26.98 Ethereum. This NFT gave Chastain’s Ethereum address to the community. Anyone can see Chastain’s transactions.
@opensea, why is it that @natechastain appears to have a few secret wallets? He seems to buy your front-page drops before they are published, then sells them for profits shortly after, and then tumbles them back into his main wallet with his punk.
(@ZuwuTV) September 14, 2021
OpenSea confirms the allegations
OpenSea has confirmed this allegation in a blog posting on Wednesday. The post stated that “this is incredibly disappointing.” “This behavior is not in line with our team’s values,” the post stated.
“Yesterday, we learned that one our employees bought items they knew would be displayed on our frontpage before they appeared publicly.” – The statement.
OpenSea has not revealed the status of Chastain’s employment with the company. However, this is not the first instance of insider trading being accused. Chastain had previously admitted to purchasing in-demand artwork from a featured artist on August 2. He was harshly criticized by the community.
OpenSea is the most popular NFT marketplace for collectors. The platform saw $1 billion in trading volume in August. This event is still under fire. Many users have voiced their disapproval at centralization and market manipulation.
CryptoPotato reported that at least $100k worth of NFTs was lost as a result of a bug in the marketplace. Although the problem was fixed, affected users could not get their NFTs back.
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