OpenSea Confirms Executive Used Insider Knowledge When Buying NFTs (theblockcrypto.com) 25
One of the non-fungible token (NFT) space's biggest marketplaces has admitted that a senior employee has been getting the drop on its most popular drops. From a report: Twitter users last night accused Nate Chastain, head of product at OpenSea, of using secret Ethereum wallets to snap up the platform's front-page NFT drops before general release. Citing transactional data on Etherscan, Twitter user Zuwu said that Chastain seems to be selling these pieces "shortly after the front-page-hype spike for profits." His actions have been likened to frontrunning or insider trading, which in regulated financial markets refers to dealing on information that is not yet public.
On September 15, OpenSea published a blog post acknowledging Chastain's actions. "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," said OpenSea. "This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough review of this incident so that we have a full understanding of the facts and additional steps we need to take." The company has rolled out new policies specifying that team members may not buy or sell from collections while they are being promoted, and cannot use confidential information to purchase or sell NFTs.
On September 15, OpenSea published a blog post acknowledging Chastain's actions. "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," said OpenSea. "This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough review of this incident so that we have a full understanding of the facts and additional steps we need to take." The company has rolled out new policies specifying that team members may not buy or sell from collections while they are being promoted, and cannot use confidential information to purchase or sell NFTs.
Repeat after me (Score:3, Insightful)
NFTs are worthless bullsh*t. Bonus points for buying them with equally worthless digital currency. Have we suddenly been struck stupid collectively as a species?
Re:Repeat after me (Score:5, Insightful)
Re: (Score:1)
So essentially no different than the modern stock market.
Re: (Score:2)
Lots of people who drive better cars than me are actually not as wealthy as me.
Re: (Score:2)
Seriously? (Score:2)
If you were serious about this, you'd ask the SEC to come in and pay them to do a full audit, then you'd lobby Congress to put your company under SEC authority.
I don't think you take this seriously at all. When I hear the guy is going to prison for years, then you will garner some level of trust.
Re: Seriously? (Score:1)
Re: (Score:2)
The scamming and insider trading is a feature, not a bug.
Re: (Score:2)
Re: (Score:2)
That was exactly their point. The company is glossing over the fact that there is nearly zero legal protection for insider trading or anything similar. But this story makes it clear to would-be investors - the company is the primary arbiter of what's "fair" and they may not take an ethically good stance. Their response seems to be carefully worded to try not to make you think about it, but it was still the first thing I thought of. Just like Uber - they want it both ways (who basically claim they should
Re: (Score:2)
I'm thinking pictures of my dogs doing stupid things, which they both do regularly because silly, goofy little dogs.
Re: (Score:3)
Of course it doesn't. Startups these days are all about finding ways to do existing things while trying to sound new enough to slip around existing regulations.
It's almost as if... (Score:1)
This whole thing is a scam to sell literally worthless shit to idiots.
Re: (Score:1, Insightful)
Re: (Score:1)
It is less selling it to "idiots", although having lower levels for the pyramid is always a plus. There are a lot of people who have money that they can't spend, so they need a way to process it through some transactions so that it is able to be used without winding up in prison.
In the past, someone would open up a bar, and even if it had a minimal amount of patrons, there were a lot of cash transactions happening, and lots of alcohol drunk. Cash from one safe would be moved to the till. Once the origina
An investigation? (Score:2)
The fact that they haven't suspended him immediately suggests they're not taking it seriously and will try to bury it.
In any well-run company, competent managers will respond strongly to allegations of financial malfeasance. Especially when it involves the company's own products. I'd expect an immediate suspension, and that's only if they believe he's innocent.
In the end, if he did nothing wrong, the suspension is basically a paid vacation before business returns to normal. That's a small price to pay to ma
Re: (Score:2)
The fact that they haven't suspended him immediately suggests they're not taking it seriously...
More like the other members of the "team" were in on it. But you're right they are just pretending to run a legitimate business.
Re: (Score:2)
competent managers will respond strongly to allegations of financial malfeasance.
This is not financial malfeasance because it isn't effecting the company finances. It isn't even insider trading because NFTs aren't securities and OpenSea isn't a financial institution. This is unethical misuse of private corporate data. It may not even be illegal.
Not even fired? (Score:4, Informative)
How serious can you take their commitment when they don't even fire him.
The entire market is bagholders keeping up appearances and wash traders. Flipping to bagholders ASAP is how you make money, except for the rare few NFTs which might attract the traditional art crowd who just want bragging rights. Interchangeable drawing of an ape number 100 does not give bragging rights.
Re: (Score:2)
Why would they?
The whole point of the crypto space, at least to the early evangelists was that it was unregulated, and resistant to being regulated. With cryptocurrency nobody was going to tell you who you could send money to, or to ask questions about where you got your money from and what you were going to do with it. Bitcoin turned out to be very traceable, but that was a flaw in the design, really. The proponents didn't need daddy government to tell them what to do.
Now some of them are rediscovering why
Re: (Score:3)
How serious can you take their commitment when they don't even fire him.
What commitment? They were quite clear that the policy against illegal insider trading is a "new policy". I'm more curious as to how this employee did not reflect their values if they didn't even have rules against this sort of behaviour.
Re: (Score:2)
It's more like a Sotheby's employee (Score:2)
It's a complete scam, and the fact the company, that purports to run a fair market platform, doesn't see why they have to fire the cheating employee means they lack the integrity to operate such a market.
People should migrate to other available NFT markets ASAP. This company is a joke.
Defeat the Purpose? (Score:2)