OpenSea’s Head of Product Nate Chastain gets into hot water for snatching up hot NFTs based on insider knowledge

  • OpenSea, a platform where people can buy and sell NFTs, is facing a controversy today. Its own Head of Product Nate Chastain was reportedly using secret crypto wallets to purchase NFTs before they were featured and prominently shown on the OpenSea platform. Chastain appears to admit as much in the tweet from Aug. 2, 2021.
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  • Internet sleuths uncovered the purchases by analyzing Chastain’s Ethereum addresses and the wallets indicated in the purchases and sales, according to Ryan Weeks of The Block.
  • @McMoney.ETH apparently discovered the transactions showing purchases of NFTs at a lower price on OpenSea followed by sales at a higher price. Apparently, the profit from the sales runs around several thousand dollars, which seems to be a modest amount–though it could quickly add up during a year.
  • Although federal “insider trading” laws do not apply to NFTs, OpenSea today acknowledged its disappointment with Chastain’s purchases.

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 announced a new policy forbidding this kind of “insider purchase.”
    • “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.”