Opensea NFT Marketplace faces insider trading scandal – On September 15, the top non-fungible token (NFT) marketplace, Opensea, revealed that an Opensea executive profited from insider trading. “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,” Opensea informed the public on Wednesday. Opensea did not name the employee, but social media posts accused an Opensea executive of using “secret wallets” on Tuesday.
Opensea Team Says NFT Market Operators Are ‘Incredibly Disappointed’
Opensea is the leading NFT market in terms of trade volume and during the last seven days, Opensea saw $519.51 million in volume, according to dappradar.com stats. While the volume is decent, it is down 48.20% during the last week in terms of sales. Meanwhile the number of Opensea traders did increase last week by 6.10% to 164,878 traders. On Wednesday, the Opensea management team announced that an employee has been accused of leveraging and profiting from inside information.
“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,” Opensea’s statement details. “This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team.”
Opensea to Implement New Policies for Employees
According to the marketplace operators, are conducting an “immediate and thorough review of this incident.” The firm wants to gather a “full understanding” of how this happened and go over precautionary steps. The popular NFT marketplace Opensea added the company has implemented a few new policies such as:
- Opensea team members may not buy or sell from collections or creators while we are featuring or promoting them (e.g. on our home page); and
- Opensea team members are prohibited from using confidential information to purchase or sell any NFTs, whether available on the Opensea platform or not.
On September 14, the Twitter account @Zuwutv tweeted about an employee leveraging “secret wallets” to buy front page drops. “Hey, Opensea,” Zuwutv tweeted. “Why does it appear @natechastain has a few secret wallets that appears 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?”
The problem with insider information during NFT market auctions and sales is that the prices of NFTs in general can be susceptible to manipulation. Bitcoin.com News has covered the subject of manipulated NFT sales and auctions. In that report, shill bidding was discussed and how shill bidding can affect NFT auctions, and auctions in general, in a negative manner.
While, social media posts accused an executive of the insider trading, Opensea did not name the accused employee in the statements made on Wednesday. Opensea explains that the outing of a suspected employee manipulating NFT sales shows the marketplace’s commitment to keeping the NFT industry trustworthy.
“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,” Opensea’s statements concluded. “We’re committed to doing the right thing for our users and earning back the trust of the community we serve.”The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Financial Watch. Every investment and trading move involves risk. You should conduct your own research when making a decision.