“NFT’s eBay” is running into a scandal as it admits that one of its employees traded the crypto digital assets using insider information from the platform.
Yesterday, a senior executive at the NFT OpenSea platform was accused of making sales on the platform, purchasing pieces from NFT collections before they appeared on the platform’s home page. According to Twitter user @ZuwuTV, the startup’s Product Manager was using secret crypto wallets to buy drops before they appeared on OpenSea’s homepage, selling them shortly after OpenSea publicly highlighted them and funneling the proceeds to his account. principal. Users linked to a handful of executive-linked account transactions on the public blockchain, including a drop in NFT which, at the time, was actively featured on the platform’s homepage.
Today, OpenSea appeared to acknowledge the incident, saying in a blog post that it had “learned that one of our employees purchased items that they knew were ready to be displayed on our home page before they appeared there publicly.” The company did not identify the employee, but said they were conducting an “immediate” review of the incident. The startup, which was recently valued at $ 1.5 billion after raising a $ 100 million Series B from Andreessen Horowitz, added in the unsigned blog post that this incident was “incredibly disappointing.”
“We are conducting a comprehensive review of yesterday’s incident and are committed to doing the right thing for OpenSea users,” OpenSea CEO Devin Finzer said in a tweet.
OpenSea, which posted a record $ 3.4 billion transaction volume last month, appears to have had no rules in place preventing employees from using sensitive information to buy or sell NFT on their own platform to their own users. The company detailed that it was now implementing a policy that team members could not buy or sell “from collections or creators while we are presenting or promoting them”, and that they are “prohibited from using confidential information to buy or sell any NFT, either whether it is available on the OpenSea platform or not. ”
Most NFTs are generally not assumed to be securities, despite little official guidance from the SEC on the class of cryptoassets. Some in the space have questioned whether the different mechanics around buying and selling, along with ongoing reward structures, may be pushing some NFT sales even further into stock territory.
“Many have felt tied down by dramatic jumps in the value of new digital assets,” Senate Banking Committee Chairman Sherrod Brown said in a hearing yesterday, transcribed by The Block, where the relationship between crypto markets and the SEC application. “Some professional investors and celebrities make making millions look easy. But, as we are reminded over and over again, it is never that simple, and too often someone’s quick profits come at the expense of entire workers and communities.” .
