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Product after insider nft accusations

product after insider nft accusations

According to the company they have now also implemented new policies stating that team members are not allowed to buy or sell from collections or creators while they are being featured on the home page and employees are prohibited from using confidential information to purchase or sell any NFTs.

Some users on Twitter also point out that this is not the first time Nate has been accused of front-running customers. On August 3 this year, one user pointed out that he had jumped on something before everyone else. Nate responded to this tweet with, “I just wanted to secure one of these before they all disappeared, tbh.”

Blockchain technology makes research like this possible

While the event could be seen as bad press for the NFT industry, there is also an argument that the only reason Zuwu discovered these transactions was because of the transparency of the blockchain.


At the time,Chastain tweetedthat he “just wanted to secure one of these before they all disappeared [to be honest].”

He has not yet commented publicly on the current accusations or OpenSea’s statement this morning.Decrypthas reached out to Chastain for comment, and we will update this story if we hear back from him.

OpenSea is reviewing the situation before taking any “additional steps,” according to its post. In the meantime, the company has instituted new policies prohibiting employees from purchasing NFTs from collections and creators while they are being featured on the site, as well as blocking the use of confidential information to purchase NFTs—on OpenSea or elsewhere.

“For a new, more open internet that empowers creators and collectors, we will need to bake in trust and transparency into all that we do,” the statement reads.

On-chain data suggests Chastain, using confidential information, could buy NFTs before they were announced on the homepage and helped him make huge profits.

NFTs tend to jump in value when they or the artists are promoted on the homepage of OpenSea. Allegedly, Chastain knew that certain NFTs were listed on the homepage and used this information to trade NFTs.

Twitter user Zuwu posted a message indicating that they had analyzed on-chain data; that is when the crypto community first became aware of Chastain’s activities.
The Twitter post accused Chastain of buying NFTs ahead of homepage listings by using “a few secret wallets.”

A more recent development is that Nate Chastain resigned today from his post as product head, according to OpenSea.

However, as there is no specific NFTs legislation on such practices, some would say OpenSea, and the employee have done nothing illegal.

But at the same time, there’s no question that the practice is highly immoral.

Twitter Users Uncover ‘Insider Trading’ of NFTs On OpenSea

Things started to unveil on Tuesday when a Twitter user posted peculiarities with the buying habits of OpenSea’s Head of Product, Nate Chastain.

“Hey OpenSea why does it appear Nate 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, and then tumbles them back to his main wallet with his punk on it?”

According to the Twitter user Zuwu, it seemed as Chastain was buying NFTs before they were listed on the front page.

The primary contention surrounding the launch is MekaVerse’s claim that there would be “raffles to make it fair for everyone [to mint] without high gas fees,” yet the team didn’t use a Verifiable Random Function. This makes it impossible to prove with certainty that the distribution was genuinely randomized.

Though it’s unclear whether the drop was rigged, MekaVerse wouldn’t be the first bad actor in the NFT space; last month, OpenSea suffered a widely-publicized blunder when an employee was caught using insider information to make profits off NFTs the marketplace had promoted.
He resigned after on-chain analysts exposed the activity to the community.

The trading value of the MekaVerse collection has suffered amid concerns that the distribution may have been manipulated.

It processed $3 billion in volume last month and currently tops the leaderboard for the most ETH burned since EIP-1559.

It remains to be seen how OpenSea will ensure any such incidents do not occur in the future and whether the team has plans to decentralize its governance so that insiders within the company are more accountable.

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Although Chastain has not replied to confirm, his Twitter status shows OpenSea as a past status.

I think we all say that coming, and I’m happy it happened. What I’m not happy about is people still tagging him and harassing him to resign and attacking him in a toxic manner.
He faced his consequences. Meme all you want, but no toxic bs

Zuwu

Mark Cuban says about the matter:

Any discussion of crypto regulation has to start with the facts that there are already laws against fraud and that “crypto” is not monolithic. There are many layers to “crypto” here are my thoughts and all are subject to change as I learn more

Mark Cuban

Other Twitter users also responded to the threat, and it soon became apparent that someone had been “flipping” NFTs, and the profits were being returned to Chastain’s public address.

TL; DR Breakdown

  • OpenSea Executive Chastain under fire for insider trading.
  • Unhappy NFT collectors have taken shots at OpenSea, among other issues.

The head of product development, Nate Chastain, at OpenSea, which is one the largest NFT marketplace in the world, has come under fire for using insider information in NFT trading. The NFTs were bought before they were featured on the platform and later sold when their value soared to make profits.

They were doing quite well as the number of transactions surged since July.

OpenSea admits this is ‘incredibly disappointing”

OpenSea appears to have confirmed the accusations that Nate Chastain used insider information on the platform for NFT trading when they were promoted and returned profits to his public wallet.

There’s also a lot of discussion about the massive electricity use and environmental impacts of NFTs. If you (understandably) still have questions, you can read through our NFT FAQ.

We have a strong responsibility to our community, and we take any breach of trust incredibly seriously.

We’ve taken additional steps to address this and are investing in policies that move the space towards greater transparency and openness.

Update: https://t.co/NWExSdThOf

— Devin Finzer (dfinzer.eth) (@dfinzer) September 16, 2021

The incident came to light after the NFT community began digging into transactions in Chastain’s public wallet.

Community members, taking advantage of the blockchain’s openness and semi-transparency, were able to find transactions that seemed to indicate that he was secretly flipping NFTs.

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You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment.

While an investigation is apparently still ongoing, OpenSea does say that it’s implemented clearer rules to prevent employees from doing this kind of thing in the future.

We have a strong responsibility to our community, and we take any breach of trust incredibly seriously.

We’ve taken additional steps to address this and are investing in policies that move the space towards greater transparency and openness.

Update: https://t.co/NWExSdThOf

— Devin Finzer (dfinzer.eth) (@dfinzer) September 16, 2021

The incident came to light after the NFT community began digging into transactions in Chastain’s public wallet. Community members, taking advantage of the blockchain’s openness and semi-transparency, were able to find transactions that seemed to indicate that he was secretly flipping NFTs.

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