OpenSea admits incident as top executive accused of trading NFTs on inside information – TechCrunch

The “eBay of NFTs” is met with a scandal as it admits that one of its employees traded the crypto digital assets using inside information from the platform.

Yesterday, a senior manager of the NFT OpenSea platform was accused of leading the sales on the platform, purchasing pieces from the NFT collections before they were featured on the platform’s homepage. form. According to the Twitter user @ZuwuTV, the startup’s product manager was using secret crypto wallets to buy drops before they were listed on the OpenSea main page, selling them shortly after they were publicly highlighted by OpenSea and redirecting profits to his main account. Users linked to a handful of transactions from executive-linked accounts on the public blockchain, including an NFT drop that was, at the time, actively listed on the platform’s home page.

Today, OpenSea appeared to acknowledge the incident, claiming in a blog post that it “learned that one of our employees had purchased items that they knew needed to be posted on our homepage before. let them appear publicly ”. The company did not identify the employee but said it was conducting an “immediate” review of the incident. The startup, which was recently valued at $ 1.5 billion after raising $ 100 million Series B from Andreessen Horowitz, added in an unsigned blog post that the incident was “incredibly disappointing.”

“We are conducting a thorough review of yesterday’s incident and are committed to doing the right thing for OpenSea users,” OpenSea CEO Devin Finzer said in a statement. Tweeter.

OpenSea, which achieved a record transaction volume of $ 3.4 billion last month, does not appear to have had any rules preventing employees from using confidential information to buy or sell NFTs on its own platform at its own users. The company clarified that it is now implementing a policy that team members cannot buy or sell “from collections or designers while we are showcasing or promoting them,” and that it is up to them. “Prohibits the use of confidential information to buy or sell NFTs, whether available on the OpenSea platform or not.

Most NFTs are generally not meant to be securities, despite little official SEC guidance on the crypto asset class. Some in the space have questioned whether the different buy and sell mechanisms, as well as the ongoing rewards structures, might push some NFT sales further into securities territory.

“Many have been drawn to dramatic increases in the value of new digital assets,” Senate Banking Committee Chairman Sherrod Brown said at a hearing yesterday – as transcribed by The Block – where the relationship between crypto markets and SEC enforcement was discussed. “Some professional investors and celebrities make making millions seem easy. But, as we are reminded time and time again, it is never that simple – and too often someone’s quick profit comes at the expense of workers and entire communities.

We contacted OpenSea for further comment.

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