In the midst of OpenSea’s insider trading scandal, the employee at the center of it has decided to resign his position.
In a blog post on Sept. 15, OpenSea admitted that one of its higher-level employees had been scamming the system to profit from non-fungible token (NFT) sales. The employee in question, Nate Chastain, was the head of product at OpenSea before his recent resignation.
Chastain was accused on Twitter of operating several digital wallets that would manipulate the NFT market on Opensea. Chastain’s method was to figure out which NFTs would be featured prominently on the website and purchase them before they were available to the public. Chastain would then turn around to sell the NFTs for a profit once the price inevitably grew from being featured on the homepage.
The scam was figured out by a user on Twitter who posted asking OpenSea about the unusual activity. The user claimed to have traced NFT sales back to Chastain that had used several different wallets to carry out the scheme.
Next steps for OpenSea
A third-party review of the situation is being conducted, OpenSea said on Sept. 16. “We do not take this behavior lightly. Upon learning of this conduct, we immediately commissioned a third party to conduct a thorough review of the incident and make recommendations on how we can strengthen our existing controls. That review is ongoing, but we are committed to quickly implementing its recommendations.”
OpenSea also mentioned they have adjusted the rules and regulations that govern employees’ use of the product they work for. OpenSea employees are now banned from buying or selling from collections that are being actively featured or promoted on the marketplace. OpenSea added that they will also be prohibiting members of its team from using the same information that Chastain used to buy or sell any digital art.
The statement from OpenSea regarding the issue concluded by assuring users that this was an isolated incident and that “we want OpenSea to be a level playing field for buyers, sellers, creators, collectors, developers, and those who are new to the space.”
The company stated as well that it would be providing updates to the story as they develop.
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