update 16 September 2021

Employee Traded Insider Information, Opensea Confirms

Opensea NFT marketplace confirmed on the 15th that one employee was insider trading. The event came after several social media users accused one of their top executives of trading insider information. Opensea accepted publicly and announced the new policies they set against insider trading in the future.

Opensea Employee Trading Information

On Wednesday, Opensea confirmed that one of their employees had taken part in insider trading. Opensea is the largest NFT marketplace. It had trading volumes of over $3.3 billion in August. Yet, they faced accusations of one of their employees committing insider trading. One tweet by a Twitter user, Zuwu, reads in part;

“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?”

ZuwuTV tweeted on 14th, and on 15th, Opensea responded. The Opensea team accepted that one of their employees is insider trading. They mentioned that they would be conducting a thorough investigation of the saga. Although Opensea did not say who, they noted that one person was behind the tale. The person in question allegedly had a connection to All wallets involved in the events.

Opensea’s Insider Trading Policy

Although one person is to blame, Opensea seems to also be in the wrong. It’s much likely that Opensea didn’t have any policies set against insider trading. For a large institution dealing with valuable assets, such policies are essential. On the news, Opensea created some rules that could help in ending such occurrences.

One of them noted that the team members would not buy NFTs or creators in their promotion period. That means that they won’t take part in purchases when the NFTs are on the homepage.

The second policy is the prohibition of selling private information on NFTs. Employees should not sell any NFT confidential details before, during, or after promotion. Opensea noted that they aim to build trust on the internet by eliminating malicious activities.

The Regulatory Issue

The scandal brought back the question of regulations in the blockchain and specifically NFTs. NFTs seem to be in the grey area of regulations. Thus some consider the actions not illegal.

Boaz Sobrado, one of the famous crypto enthusiasts, mentioned that regulators do not need expended power. Instead, the regulators should be acting since whatever happened at Opensea is illegal.

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“Regulators don’t need their powers expanded to be able to combat this sort of fraud and misleading statements.”