Mark Cuban-backed OpenSea says it's found evidence of insider trading on its NFT platform
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- OpenSea said it found evidence of insider NFT trading on its platform and was looking into the matter.
- The company said it has now put policies in place to prevent further insider trading.
- It said an employee was responsible but did not name them.
OpenSea, the non-fungible token platform backed by billionaire Mark Cuban, said it has uncovered evidence of insider trading by an employee in a statement on Wednesday.
An employee had purchased some digital tokens knowing that these were due to be featured on the OpenSea front page before this information was made public, the statement said.
Non-fungible tokens, or NFTs, are unique digital collectible items that reside on a blockchain that can be bought and sold on platforms such as OpenSea and have grown in popularity this year.
Celebrities, sports players and even fashion houses have embraced them and OpenSea is the largest online marketplace for these digital assets. The company has 400,000 registered traders who have made at least one transaction. It logged a record of more than $3 billion in transaction volumes in August alone, according to Dune Analytics data.
"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. We're committed to doing the right thing for our users and earning back the trust of the community we serve," OpenSea said.
The platform did not name which employee was responsible for the insider trading, but one Twitter user named OpenSea employee Nate Chastain, who is head of product, as being at the center of the transactions. Chastain was not immediately available to comment when contacted by Insider.
"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's tweet said.
Representatives from OpenSea were not immediately available to comment when contacted by Insider.