OpenSea, the largest NFT marketplace on the planet, is conducting an investigation into its Head of Product after users accused him of using insider information to trade and profit off of NFTs.
The controversy erupted Tuesday night when Twitter user ZuWuTV posted evidence that OpenSea Head of Product Nate Chastain was buying NFTs shortly before they were featured on the marketplace's webs site. The evidence alleges Chastain would then sell the NFTs after they were featured prominently on OpenSea, driving up the price.
Wednesday morning, OpenSea acknowledged the apparent activity and said they were investigating.
"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," the statement read. "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."
OpenSea slammed Chastain's actions while acknowledging there were no hard company policies against what he allegedly did. It announced it had implemented the following policies in response:
- 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.
It's unclear if OpenSea or Chastain could find themselves in legal jeopardy over the incident.
Chastain has long been a fixture in the NFT community. He's active on Twitter and frequently troubleshoots issues with the OpenSea platform for users.
OpenSea is coming off an incredible August. The NFT marketplace logged more than $3 billion in transactions during the month, netting the service more than $75 million in transaction fees alone.
The news left many shocked.
In late July, it announced it had raised $100 million at a $1.5 billion valuation, led by a16z.
Disclosure: Stephen Stirling is a senior reporter for the Street Crypto. He is an NFT artist that uses the platform OpenSea, and holds NFTS from NBA TopShot, Zed.Run, Robotos and the Adam Bomb Gang currently valued at more than $500 USD.