NFT marketplace OpenSea says Goodbye to the executive that was caught insider trading ethereum NFTs and making profits from the platform as we reported recently in our cryptocurrency news.
According to the announcement, OpenSea says goodbye to Nate Chastain after he was caught trading NFTs using insider information. The company also hired another party to review the platform’s policies and advise on further changes. The leading NFT marketplace OpenSea parted ways with Chastain as its former head of product after the executive was discovered profiting from the trades of NFTs based on insider info. The announcement read:
“We have a strong obligation to this community to move it forward responsibly and diligently. The behavior of one of our employees violated that obligation and, yesterday, we requested and accepted his resignation.”
Although OpenSea’s post didn’t name Chastain specifically, he updated his Twitter profile to reflect that he is not a part of the company anymore. OpenSea even wrote that it engaged another party to conduct a review of the incident and to make recommendations on how they are able to strengthen the existing controls. The investigation is still ongoing as the company said, with no stated timeline for completion:
“As a marketplace at the forefront of this new space, we want OpenSea to be a level playing field for buyers, sellers, creators, collectors, developers, and those who are new to the space. We are incredibly thankful for the support of our community and will continue to invest in practices and policies that keep our platform open and transparent. We’ll continue to proactively provide updates as we evolve our policies and increase transparency in all that we do.”
OpenSea confirmed that an employee used privileged information to profit on the sale of NFTs and Chastain even was accused of purchasing NFTs from collections that we’re going to be featured on OpenSea’s main page and then selling them for a bigger profit. The public data pulled from the ETH blockchain only suggests that Chastain used various burner wallets besides his main one to buy the NFTs. Once the collections in question were featured on the OpenSea main page and the demand pushed the sale prices up, the holders of the additional wallets sold the NFTs at a higher price than they were purchased for. ETH gained for those sales and was funneled back into his wallet.
The NFT acts like a deed of ownership for the provably scarce item and can take the form of images, videos, and more. OpenSea emerged as the most popular platform for buying and selling NFTs and processing up to $3.4 billion in transaction volume in August alone according to Dune Analytics which is more than 10 times the total volume from July.
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