OpenSea marketplace has confirmed a company executive is guilty of insider trading, using confidential information to profit big on NFTs.
Yesterday, a Twitter storm broke out when the company’s Head of Product, Nate Chastain, was publicly accused of purchasing NFTs destined for the website’s front page before their public listing. The digital artworks would then spike in price once they were featured prominently on the OpenSea website allowing Chastain to cash in.
OpenSea, the world’s largest NFT marketplace, confirmed the news in a statement which labelled the incident “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,” the statement read.
While insider trading is not explicitly illegal in the crypto space OpenSea has said it will create new policies to prohibit frontrunning by staff.
Under new guidelines OpenSea team members will be disallowed from buying or selling artworks while they are featured or promoted on the company’s homepage. Using confidential information to purchase or sell any NFTs, whether available on the OpenSea platform or not, will also be forbidden under the rules.
OpenSea has seen transaction volumes of $4.1bn over the past thirty days, up 236 per cent on the previous month amid surging interest in NFTs.
Read more: NFTs – what am I buying?