22/09/2021 Insider Trading Allegations Rock OpenSea, NFT Marketplace Responds
Nate Chastain, OpenSea’s head of product, is at the center of the scandal that emerged on Twitter on Tuesday night.
In a statement issued Wednesday morning, leading non-fungible token (NFT) marketplace OpenSea said it uncovered evidence of insider trading by one of its employees.
“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 statement reads.
The statement doesn’t have a byline, but the public relations team for Andreessen Horowitz, a major investor in OpenSea, has been handling company communications around the scandal, which comes less than two months after OpenSea snagged a $1.5 billion valuation in a $100 million funding round.
Allegations of insider trading at OpenSea appeared last night, courtesy of a Twitter account called @ZuwuTV, and quickly went viral.
In a thread, the Twitter user assembled a paper trail of transaction receipts tied to Nate Chastain, OpenSea’s head of product. Chastain, the Twitter account alleged, was investing in NFTs just before OpenSea featured them on the front page of its website, and then cashing out on the consequent price increase.
Chastain didn’t immediately return a request for comment.
Insider trading on NFTs is, of course, not explicitly illegal yet, because there’s so little legal precedent for digital assets on the blockchain, but OpenSea is coming down hard anyway.
The company says it’s implementing new policies that prohibit this kind of behavior.
“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,” reads the statement. “We’re committed to doing the right thing for our users and earning back the trust of the community we serve.”
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