Waves of shock have hit the NFT scene after they caught an employee from OpenSea insider trading. Opensea’s Head of Product, Nate Chastain resigned from his position, the NFT marketplace confirmed. Essentially, Chastain used his position at OpenSea to conduct insider trading. Reportedly, he made himself around 19 ETH or $67,000 in profit.
What Happened with insider trading on OpenSea?
A few days ago, allegations were made on Twitter by @ZuwuTV that Chastain has secret wallets of which Opensea Employee, Nate Chastain was buying front-page drops before they were listed, then selling them shortly after the ‘front-page-hype spike’ for profits. He then transferred these profits from the secret wallets to his main, where he holds a Cryptopunk among other NFTs.
Opensea confirmed the trade scandal via their blog. They also released new rules. Now, they prohibited the use of confidential information to purchase or sell any NFTs. Previously, the company – albeit non-officially – allowed employees to do this. So it could suggest other employees may have done the same. Technically, he didn’t actually break any rules, despite exercising bad practice. However, due to backlash, the employee resigned from his role.
What does this mean for the Future?
After the Opensea insider trading scandal, fans may question their future on the platform. We may see people move onto other platforms or even other blockchains due to uncertainty. In fact, recently alternative blockchains are very much on the rise . Basically, these other chains have unique selling points over Ethereum. Namely, they have lower gas fees and faster transaction speeds. The insider trading scandal has come at a difficult time for Opensea, with transaction levels at an all time high. Unless we see some changes on the platform, users may look elsewhere. In response to the backlash, OpenSea aimed to put their users’ minds at ease.
The company stated: “We want OpenSea to be a level playing field for buyers, sellers, creators, collectors, developers. As well as those who are new to the space”. As well as confirming that they’ll be providing updates as the story develops. Also, a video on the situation was made by popular YouTuber Giancarlo Buys Tokens, which you can view here.