OpenSea Reveals ‘Incredibly Disappointing’ Insider Trading Scheme

Giant NFT-dedicated platform OpenSea shocked its community by confirming an insider trading scheme. Although the company hasn’t officially identified the culprit, a Twitter user has been repeatedly accusing the platform’s head of product, Nate Chastain.

OpenSea, attacked from the inside out

Over the past few days, the media has been buzzing about a potential OpenSea insider trading scheme. At last, the NFT platform has confirmed the rumors in an official statement:

“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,” the group said in a blog post.

Up until now, OpenSea didn’t reveal the identity of the culprit ‘as of right now.’ Accordingly, the team aims to finish its internal investigation before releasing any official statements.

However, the media already has a suspect called Nate Chastain, who is the head of product at OpenSea. According to Twitter user @ZuwuTV, Chastain had been using several digital wallets to purchase front page drops:

Moreover, Chinese crypto news website 8btc has been tracing multiple sales linked to Chastain’s alleged scheme. Accordingly, the platform has found a profit of $67,000, or 18.875 ETH. However, OpenSea has refused to declare the exact profit its employee made until now.

Will OpenSea implement new restrictions?

Although OpenSea has been very strict about its trading policies, it has allowed plenty of freedom when it comes to its employees. As a result, the company now has to pay for its regulatory gap.

In fact, this shocking episode will likely make many other NFT platforms question their own limitations. This comes as the entire non-fungible token market is fairly new, and there are still plenty of legal aspects to establish.

Either way, fintech data analyst Boaz Sobrado agrees that the OpenSea insider trading scheme is undoubtedly an illegal act:

“There’s a lot of chat about regulation right now, but what a lot of these bad actors are doing is clearly against the law right now. Regulators don’t need their powers expanded to be able to combat this sort of fraud and misleading statements.”