OpenSea, An NFT Startup Valued At $1.5 Billion, Admits “Insider Trading”

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Last Updated on 17 September 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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OpenSea is one of Silicon Valley’s newest goldilocks firms. The NFT trading marketplace was recently valued at $1.5 billion by Wall Street firms, not bad for a brand new organization run by only a few people dealing in Non-fungible-tokens that anyone can make from their computer.

Their success looked to make them all billionaires in the short run, until a Twitter user named Zuwu TV posted the following statement earlier this week:

Hey @opensea  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?

Advertentie.

Front running NFT purchases

Translation for those not in the know: The Head of Product of the company, a man called Nate Chastain, would buy an NFT for himself just before OpenSea, the world’s biggest NFT trading platform, would then feature the piece on the front page of its website.

You can guess what happened next given the FOMO in today’s NFT marketplace. The price of the piece of art would jump following the buzz of its main page listing and Nate would net a hefty profit.

Given that crypto analytics firm recently estimated Open Sea’s monthly volume of trading at around $3.4 billion, we guess Nate made some decent money from this front running insider trading scheme and can thus afford a good lawyer.

OpenSea meanwhile saw its value (and sales of NFTs) drop quite a bit. In order to stop the bleeding, the firm admitted, in good marketing terms that they:

Learned that one of our employees purchased items that they knew were set to display on our front page before they appeared there publicly.

By this morning, Nate’s Twitter bio mentions that his past career was at OpenSea. Guess we’ll learn soon enough whether he was fired or left.

NFT company, not ready for Wall Street just yet apparently.