- An employee from NFT platform OpenSea faces accusations of insider trading
- According to Twitter user ZuwuTv, Nate Chastain used secret wallets to buy NFTs pre-launch and sold them for profit
- OpenSea later confirmed its Head of Product’s actions and informed that they have innitiated a probe into the matter
YEREVAN (CoinChapter.com) — In a shocking revelation, an employee of the largest Non-Fungible Token (NFT) platform OpenSea stands accused of insider trading.
According to Nate Chastain’s wallet transaction history, he used privileged insider information to acquire NFTs from the front page before OpenSea listed them. He later sold them at higher prices.
Twitter user catches Chastain red handed
The incident came to light when Twitter user ZuwuTV questioned OpenSea about the actions of their employee.
To the apparent shock and disappointment of the NFT community, ZuwuTV revealed that Chastain “has a few secret wallets that appears to buy your front page drops before they are listed, then sells them shortly after the front-page-hype spike for profits”.
Other users pointed out that Chastain has a history of abusing his position at the organization. It appears another user had identified his illegal action last month, only back then it had not received much attention.
In a reply to a similar tweet on August 3, Chastain appears to admit to grabbing an NFT from a collection by the artist Arya Mularama before the platform made it public. “I just wanted to get one of these before they all disappeared tbh,” wrote Chastain at the time.
ZuwuTV posted multiple links from Etherscan to back their claim that the OpenSea Head of Product profited from insider trading. Other users also did the same, revealing multiple cases of misconduct.
Tracking Chastain’s OpenSea wallet
To an untrained eye, the data available on the Etherscan platform will reveal very little. Other than numbers and codes, an average user will find it hard to know what information lies hidden behind them.
But how did ZuwuTV know which wallet belongs to Chastain?
The OpenSea employee’s display picture (DP) is an NFT CryptoPunk #35. According to OpenSea data, the owner of the wallet A3A45T purchased the Non-Fungible Token on 25 February 2021 for 26.98 Ether (ETH).
With this information, ZuwuTV identified the wallet as Nate Chastain’s. He was hence able to track all other transactions and activities by him.
On close observation, ZuwuTv identified illegal front running and publicly alerted OpenSea about it.
OpenSea orders probe in the incident
Through a blog post published on September 15 and shared by Co-Founder and CEO Devin Finzer, OpenSea confirmed Chastain’s actions and informed users that they have taken cognizance of the matter.
Expressing disappointment, the company assured that their senior employee’s behavior “does not represent our values as a team.”
OpenSea further stated that they have rolled out new policies specifying that team members may not buy or sell from collections while they are being promoted. They als0 cannot use confidential information to purchase or sell NFTs.
“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 company stated.
The accused, Nate Chastain has not come up with any statement regarding the accusation leveled against him.