OpenSea head officer caught on insider trading

[FatFork]

It seems that @natechastain, one of the OpenSea executives, was caught on insider trading.


source: https://twitter.com/zuwutv/status/1437921263394115584

According to twitter user @ZuwuTV, here is one tx on returning profits to the main 0xa3a4548b39da96eb065ff91811ca30da40431c0d wallet after flipping the item currently on the front page of the OpenSea platform: https://etherscan.io/tx/0x54bcb222978a0daa91276edce9d59fab8d276439c797d123c29fadf4ccacf316

What is your opinion on this? I am looking forward to watching this drama unfold.

[1715392285]

1715392285

[pergola]

I don't feel surprised. There may be groups of people doing insider trading with Opensea to promote value for NFT works. That is also the reason that recently GAS fees have increased continuously. Most of the transaction costs come from Opensea.

[tyz]

Crypto trading is in large part a Wild West. Where there is no regulation, the door is open to abuse through insider trading, pump and dumps and other forms of abuse. But this is not a new problem, it is part of the crypto market. And I think due to its decentralized nature is will remain a part for a long time. So this news is not a surprise.

[cryptomaniac_xxx]

We will see how this drama unfolds, this is an accusations that needs to be answered by Nate himself.

The accuser has shown has some proof, so the ball is on the hand on Nate to disproved it. Otherwise it will put a dent on OpenSea reputation as we all know that his marketplace is now the go to as far as NFT is concern. So it people within are taking advantage of it and making profits illegally, then the trust will be in big question here.

[yazher]

That's one quite expensive mistake if you are a victim of those pump and dump fools. Their site is known for its fairness and convenience for buying and selling NFTs and it was just too bad for them if they are guilty of these accusations but we still need some solid proof to conclude our speculations with their platform. Nevertheless, this is just some kind of accusation until they are proven guilty and right now everything seems normal on their platform and nothing new has changed.

[amishmanish]

NFTs are a promising innovation that is being exploited to the hilt now. It has become a closed club with this system of "drops" that are communicated to your closest friends and then you all together shill it to the plebs. The result is that you sell a lot of copied 3D "Art" hyped on twitter at over-blown prices.

The opensea guy seems to have taken this a step further. He is not even taking the pain of generating the art. He selectively pumps these NFTs and the "floor price" is artificially raised. They then shill it through the group of people who are all collaborating with each other to hype it up. This is all just pretty demotivating to see because something that starts with such idealistic promises and then gets exploited so easily by bad actors. This happens all the time in crypto and the time of reckoning (atleast for those companies that are based out of the US) is pretty nigh.

[casperBGD]

it is an interesting development, would say even, expected, there is a lot of possibilities and people are using them

OpenSea is most traded market at the moment, and being on the front page is massive for any NFT, but OpenSea as well did not go crypto-way, with decentralization, they are involving large funds, and the goal is to make profit, not to put users first
but, it is hard not to use OpenSea and be involved into NFT market, most NFT's are first there, and than spread around

[FatFork]

OpenSea admitted and says mea culpa?

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.

This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough review of this incident so that we have a full understanding of the facts and additional steps we need to take. We have also implemented the following policies:

• 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.

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.

source: https://opensea.io/blog/announcements/employee-information-use-at-opensea/

[pawanjain]

No wonder an insider trading case for NFT popped up. I heard something similar in the Solana NFTs too where someone was buying all rare NFTs in popular NFT projects.
People were getting mad at him because he was able to buy rare NFTs in multiple projects.
This seems similar and I think it's quite stupid for people like us to pay such huge amounts and get into the hassle of buying NFTs among such large population while these people are getting the rare NFTs just like that.
This doesn't look fair at all and this might end the NFT craze as well if it keeps going on like this where a few people gets all the rare NFTs.

[Silberman]

Crypto trading is in large part a Wild West. Where there is no regulation, the door is open to abuse through insider trading, pump and dumps and other forms of abuse. But this is not a new problem, it is part of the crypto market. And I think due to its decentralized nature is will remain a part for a long time. So this news is not a surprise.

I agree that this is not a surprise at all, what are people expecting out of NFTs? The idea has some merit and it could eventually work out but the way all of this is being implemented is all wrong and I feel this is going to keep being this way for a long time and as such I have no interest in forming part of it because the only ones that will become rich are the ones that create market places to trade NFTs and the people that sell them for inflated prices to the public.

[haidil]

How not, because of the rampant sales of NFT, it has become a source of abundant income even for an executive involved in Opensea. This proves that the possibility of rampant insider selling is not just one or two cases. If you look at the current list of NFTs on Opensea, it's quite worrying. Random NFT at a glance is just an NFT that we can create and enter into Opensea and then set the price according to our wishes. That way, they stumble and compete for the top spot. Finally, involvement is the key to uncovering activities that are quite detrimental to many parties.

[Yogee]

hehehe this proves what many digital art NFT critics' suspicion.

OpenSea admitted and says mea culpa?

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.

This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough review of this incident so that we have a full understanding of the facts and additional steps we need to take. We have also implemented the following policies:

• 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.

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.

source: https://opensea.io/blog/announcements/employee-information-use-at-opensea/

It's the least they can do. I don't think this incident will create more transparency in the platform. They will just find better ways to hide their pumping strategy and keep doing it. I hope this revelation would force NFT fanatics to think twice before buying these "arts".

[letyouearn]

NFT sphere is a Wild West now - no regulation, huge risks, great opportunities. And also many rich people obviously are using NFT markets for money laundering, hehe 

[decodx]

As far as I can tell, the only reason he was discovered was is due to the fact that he was sloppy. He could have simply mixed his coins or exchanged them into fiat and back again, and no one would have ever discovered him. I don't think this case will be the last; there will be others who will follow in his footsteps. This is why centralized platforms are not the best choice for businesses such as this.

[wheelz1200]

It seems that @natechastain, one of the OpenSea executives, was caught on insider trading.


source: https://twitter.com/zuwutv/status/1437921263394115584

According to twitter user @ZuwuTV, here is one tx on returning profits to the main 0xa3a4548b39da96eb065ff91811ca30da40431c0d wallet after flipping the item currently on the front page of the OpenSea platform: https://etherscan.io/tx/0x54bcb222978a0daa91276edce9d59fab8d276439c797d123c29fadf4ccacf316

What is your opinion on this? I am looking forward to watching this drama unfold.

I don't think this is any real surprise.  Crypto is still the wild west, greed grabs a hold of any successful venture and usually collapses.  Am going to have the popcorn ready watching this calamity unfold.  Most likely will get buried amongst all the other stories though. 

[tabas]

hehehe this proves what many digital art NFT critics' suspicion.

True.
Those critics that have been talking about their doubts and suspicions towards the NFT market, well, I guess that they'll spear more on this issue after being caught.

[The Ghoul]

It is said that the person only earned 18 eth from this incident. The money he used to do this was the money his wife’s boyfriend used to treat his dog.（Online rumor）

To be honest, if that person is me. I might make more money from it.

This kind of thing is unavoidable at present. In major centralized exchanges, there are more similar incidents.

[vv181]

~snip~

Look like the announcement is edited:

Edited to clarify that the internal review will be conducted by a third party.

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.

This is incredibly disappointing. We want to be clear that this behavior does not represent our values as a team. We are taking this very seriously and are conducting an immediate and thorough third party review of this incident so that we have a full understanding of the facts and additional steps we need to take. We have also implemented the following policies:

    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.

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.

I'm not too experienced with Opensea, but are those policies are just implemented because one of the team got caught or has it's been implemented long ago? If it has just been implemented, then the suspicion should be raised that probably they/he might do it not once. It is just now that he has been caught to do it.


Latest Update:

Update (9/16/2021)

When we launched OpenSea, there was only one collection on our platform: CryptoKitties. Today, there are 20 million NFTs to discover on OpenSea.  We owe this growth to the vibrant community of creators and collectors who use our platform every day, and we have a strong obligation to this community to move it forward responsibly and diligently. The behavior of one of our employees violated that obligation and, yesterday, we requested and accepted his resignation. 

We do not take this behavior lightly. Upon learning of this conduct, we immediately commissioned a third party to conduct a thorough review of the incident and make recommendations on how we can strengthen our existing controls. That review is ongoing but we are committed to quickly implementing its recommendations.

NFTs enable something incredible that never existed before: they allow us to own things (like game items, digital art, event tickets, or collectibles) in the digital world, just like we own them in the physical world. This fundamentally changes the Internet in a way that requires strong values, organized conduct, and transparency. As a marketplace at the forefront of this new space, we want OpenSea to be a level playing field for buyers, sellers, creators, collectors, developers, and those who are new to the space. We are incredibly thankful for the support of our community, and will continue to invest in practices and policies that keep our platform open and transparent. We’ll continue to proactively provide updates as we evolve our policies and increase transparency in all that we do.

~snip~

[hugeblack]

Edited to clarify that the internal review will be conducted by a third party.

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.

Such promises will not solve the problem and will affect the platform’s reputation in the future. If they are serious about taking a solution to the problem, they should start implementing some steps:

 - Hiring a third party to ensure that there is no tampering with the platform, especially among employees.
 - Careful examination of everyone who has access to this sensitive information, which may affect sales, and to ensure that there is no conflict of interest.
 - Attempting to change the current system to ensure transparency without the need for a third party.

without above things, they are give fake promises.

[lizarder]

It seems that @natechastain, one of the OpenSea executives, was caught on insider trading.


source: https://twitter.com/zuwutv/status/1437921263394115584

According to twitter user @ZuwuTV, here is one tx on returning profits to the main 0xa3a4548b39da96eb065ff91811ca30da40431c0d wallet after flipping the item currently on the front page of the OpenSea platform: https://etherscan.io/tx/0x54bcb222978a0daa91276edce9d59fab8d276439c797d123c29fadf4ccacf316

What is your opinion on this? I am looking forward to watching this drama unfold.

The value of gas is getting higher, caused by some people who trade in NFT, who can't be controlled in promoting their art, basically NFT provides room for everyone to trade art, but there are limits that must be considered so that art works it can provide good value in the future, otherwise the higher gas will be a problem in the future.