OpenSea Confirms Executive Used Insider Information to Snipe NFTs

Share Article
In Brief
  • According to a blog post, OpenSea has confirmed that an employee had been using proprietary information to profit from NFT sales.

  • Nate Chastain allegedly used his knowledge of OpensSea to buy NFTs before they were on sale to public and then re-sell them for a profit.

  • The shady practice was uncovered by a user on Twitter who noticed unusual activity from Chastain's crypto wallets.

  • promo

    Join the BIGGEST ICO ever launched in Spain: Buy B2M now.

The Trust Project is an international consortium of news organizations building standards of transparency.

The popular non-fungible token (NFT) marketplace confirmed on Sept 15 that an employee bought NFTs they knew would be more valuable than others. 

Sponsored



Sponsored

A blog released by OpenSea on Sept 15 confirmed that one of their executives used proprietary information to profit from NFT sales. The team member in question, Nate Chastain, was, until today, the Head of Product for the platform. Chastain would buy NFTs he knew would be featured pieces that were more likely to rise in price. He would then turn around and unload the art at an inflated price. 

The scam was originally uncovered by a Twitter user named Zuwu who asked “Hey @opensea why does it appear @natechastain has a few secret wallets that appear to buy your front page drops before they are listed, then sells them shortly after the front-page-hype spike for profits, and then tumbles them back to his main wallet with his punk on it?” 

Sponsored



Sponsored

The statement from OpenSea confirms that “one of our employees” did in fact buy NFTs they knew were going to display on the front page before they were on sale to the general public. OpenSea did not confirm the identity of the employee, but transaction records show that it is more than likely Chastain. “This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team,” OpenSea adds. 

What is next for OpenSea? 

OpenSea says they will be conducting “an immediate and thorough review of the incident,” in the hopes of understanding just what happened and what the next steps are in the process. Additionally, OpenSea has put a pair of new policies in place to avoid such situations in the future. First, no OpenSea members cannot buy or sell from collections or creators while OpenSea is actively promoting them. Second, team members are barred from using any “insider information” to buy or sell any NFT. This includes NFTs on other platforms as well as OpenSea. 

The statement from OpenSea concludes with a statement that reads “For a new, more open internet that empowers creators and collectors, we will need to bake in trust and transparency into all that we do.  We’re committed to doing the right thing for our users and earning back the trust of the community we serve.”

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Matthew De Saro is a journalist and media personality specializing in sports, gambling, and statistics. Before joining BeInCrypto, his work was featured on Fansided, Forbes, and OutKick. With a background in statistical analysis and a love of writing, he takes an outside-the-box approach to reporting news.

Follow Author

Market signals, studies and analysis! Join our Telegram Today!

Go

Bit2Me ICO JUST STARTED! Buy B2M token now.

Buy now!

Market signals, studies and analysis! Join our Telegram Today!

Go