OpenSea admits insider trading

[MNbag]

https://www.bbc.co.uk/news/technology-58585342

This does not bode well for NFTs.

Exactly the same things banks do.

Why am I not suprised?

[1715664591]

1715664591

[1715664591]

1715664591

[1715664591]

1715664591

[1715664591]

1715664591

[stompix]

This does not bode well for NFTs.

Why not?
If somebody was doing insider trading with some shares does it mean those companies should go bankrupt or are bad investments?
Besides, everyone knew that all those auctions were rigged, this is just a guy who took advantage of the system but the system was bad in the first place, the moment a selection on what is to be promoted and what not happen of course it's not going to be anything fair in it.

The danger to NFTs is time, just like with every fad, not some guy making a few thousand dollars in a billion market.

[MNbag]

This does not bode well for NFTs.

Why not?
If somebody was doing insider trading with some shares does it mean those companies should go bankrupt or are bad investments?
Besides, everyone knew that all those auctions were rigged, this is just a guy who took advantage of the system but the system was bad in the first place, the moment a selection on what is to be promoted and what not happen of course it's not going to be anything fair in it.

The danger to NFTs is time, just like with every fad, not some guy making a few thousand dollars in a billion market.

Well, the difference between the share analogy and this situation is that you don't see the actual stock exchange buying shares.

Even if time would eventually kill it, this piece of news may knock off customer confidence in NFTs.

If it ain't dead now, it is dead later.

[avikz]

https://www.bbc.co.uk/news/technology-58585342

This does not bode well for NFTs.

Exactly the same things banks do.

Why am I not suprised?

Opensea is just lacking some policies around risk management. If I take an example of a stock broker of my country, I can see a solution there. No employees of any stock blocker are allowed to day trade in the stock market. If they want to buy stocks, they need to take prior approval from the risk advisory committee set up by each broker. Since every stock account is linked to a common ID, it's pretty easy to track any malpractices.

NFT marketplaces now need such kind of risk management practices which will effectively bar any employee from trading in NFTs. But given the nature of crypto, it is next to impossible really!

[Dave1]

First there was an accusations about someone from inside doing some manipulation. The alleges accusations come from someone in twitter.

And now they have admit to it? Weird in any case, are they any repercussions to the person who committed this fraud? I know that the reputation of OpenSea is on the line here, but not sure if they really value it or not. Will the next competitor take advantage of this situation?

[MNbag]

First there was an accusations about someone from inside doing some manipulation. The alleges accusations come from someone in twitter.

And now they have admit to it? Weird in any case, are they any repercussions to the person who committed this fraud? I know that the reputation of OpenSea is on the line here, but not sure if they really value it or not. Will the next competitor take advantage of this situation?

With the lack of consequences, another NFT company would come up to fulfill the demand of speculators for public images turned into overpiced pngs.

And the exact same thing will happen again, and again.

There is not a lot of consequences in crypto unless you manage to cross into millions of dollars.

[zanezane]

This is a scary thing but I don't get it though, if you're not from the company or the producer of the NFT, you can't buy yourself some of their NFTs? Although I feel like it's a stint in the journey of OpenSea, there's a lot of good NFTs there.

[SFR10]

NFT marketplaces now need such kind of risk management practices which will effectively bar any employee from trading in NFTs. But given the nature of crypto, it is next to impossible really!

Exactly! This only leads to another person teaming up with one of the employees and all it takes, is a few smaller purchases or transfers to cover their tracks before they could split the profits.
^{- It only adds a few more steps, instead of tackling the issue as a whole [endless loop]!}

And now they have admit to it?

It became too obvious to "not" admit it.

are they any repercussions to the person who committed this fraud?

Only the following thing so far ^{[IMO, that's not enough]}:

• The behavior of one of our employees violated that obligation and, yesterday, we requested and accepted his resignation.

but I don't get it though, if you're not from the company or the producer of the NFT, you can't buy yourself some of their NFTs?

You got the first part wrong:

• OpenSea team members are prohibited from using confidential information to purchase or sell any NFTs, whether available on the OpenSea platform or not.

[stomachgrowls]

First there was an accusations about someone from inside doing some manipulation. The alleges accusations come from someone in twitter.

And now they have admit to it? Weird in any case, are they any repercussions to the person who committed this fraud? I know that the reputation of OpenSea is on the line here, but not sure if they really value it or not. Will the next competitor take advantage of this situation?

Maybe there are no other ways for them to fight off since they had been bust up with some strong evidences and they are aware that reputation is indeed on the line on here.Of course this would really be an advantage

into its competitor if they do know that other does have that kind of problem which might result into such closure.When it comes to insider trading or something like this isnt really that surprising.

It is really just only a no-to-few platforms/brokers/services would really be busted up on doing such activity once bust up then that would really cost them big for sure.

[nutildah]

It's a big story because it confirms what people had already suspected for quite a while -- that the market is rigged and incredibly inflated, as are most crypto markets honestly. Undoubtedly people buy NFTs from themselves all the time. Behold the power of anonymity.

Regardless of the behavior of the humans surrounding it, NFTs are still a pretty neat concept and have a lot of transformative potential in their own right. You just won't catch me shelling out multiple ETHs for shit I could make with GIMP in a couple of hours.

[UKprod]

This is quite something that can happen. If OpenSea recommends some NFTs by themselves, they need to audit the team that is recommending it and see what are the investments made by that team so that they don't end up with something like this.

Something similar had happened in Indian share market too. A stock news reporter used to buy a stock and then recommend it on national TV and would make profits out of it by selling it once the price rises when people buy the stock.

[sikke]

https://www.bbc.co.uk/news/technology-58585342

This does not bode well for NFTs.

Exactly the same things banks do.

Why am I not suprised?

The whole NFT space is a mess.

It makes absolutely no sense that people would be willing to buy & sell JPEGs for millions without some sort of fishy insider trading.

They claim that this is 'art' but at the end of the day anyone can make these things with Photoshop/Illustrator or even an AI bot. Heck, there was one project that took off which just had a bunch of text on the screen...

Regulators will probably jump onboard soon to track this activity.

[Bitcoin_Arena]

Anybody well versed with how Etherdelta used to work back in the day should be well aware of what's going on with NFTs and OpenSea right now. It's all about manipulation and fooling the gullible buyers.

For example, if I listed my NFT on opensea, what stops me from hyping it by sending ETH to myself pretending to be different bidders in order to fool someone to buy it at x200 ETH the original price ?

[hello_good_sir]

No surprises here.

I do hope that they can get their stuff together. NFTs have some potential but at the end of the day most of the projects exchanging hands today are doing so at ridiculous valuations.

Volumes are definitely propped up by wash trading to an extent and there is bound to be lawsuits sooner or later.

[mexite]

Even though cryptocurrency is largely unregulated, I believe every organization involved in the sector should have some internal policies that forbid insider trading. It's really bad for a business to trade against its customers. It's abuse of trust and ut erodes customers confidence in the system.

[livingfree]

The news has already come out about that employee that has insider trading. He's already fired. Well, that's a dream job for many others and he did abuse it.

Here is the news.

https://ihodl.com/topnews/2021-09-17/former-opensea-employee-fired-insider-trading/

[pealr12]

First there was an accusations about someone from inside doing some manipulation. The alleges accusations come from someone in twitter.

And now they have admit to it? Weird in any case, are they any repercussions to the person who committed this fraud? I know that the reputation of OpenSea is on the line here, but not sure if they really value it or not. Will the next competitor take advantage of this situation?

Most definitely,  their reputation is really at stake here until they do something to regain the trust people hard on them, right most people will be very scared to have anything to do with opensea, as it is anything can happen because there is a red flag.

[libert19]

Why does it not bode well with nfts? This happens everywhere in crypto ecosystem - token sells, exchanges, those venture funds - if it doesn't get public, doesn't mean it's not happening elsewhere.

[MNbag]

If someone pumps and dumps a stock, it is market manipulation.

If someone pumps and dumps a NFT, it is "raising the value of their creation".

NFTs are just certificates for jpgs.

They don't do anything apart from eating up energy.

It is just greater fool theory in action.

(Reposting due to reply being deleted)

[Rabi3]

This does not bode well for NFTs.

Why not?
If somebody was doing insider trading with some shares does it mean those companies should go bankrupt or are bad investments?
Besides, everyone knew that all those auctions were rigged, this is just a guy who took advantage of the system but the system was bad in the first place, the moment a selection on what is to be promoted and what not happen of course it's not going to be anything fair in it.

The danger to NFTs is time, just like with every fad, not some guy making a few thousand dollars in a billion market.

Well, the difference between the share analogy and this situation is that you don't see the actual stock exchange buying shares.

Even if time would eventually kill it, this piece of news may knock off customer confidence in NFTs.

If it ain't dead now, it is dead later.

didn't we all knew this type of things happen ?! we all know how easy it is to do it and thought so many times that some did that on opensea, for me this won't change anything, but some people though might actually get scared, you know how news and media affect a lot of people's decisions and thoughts, so it definitely puts a red flag on nfts to some people.