The “eBay of NFTs” has a scandal as it admits that one of its employees changed the cryptographic digital assets using inside information from the platform.
Yesterday, a top executive of the NFT OpenSea platform was accused of making head-to-head sales on the platform, buying pieces from the NFT collections before they appeared on the platform’s main page. According to the Twitter user @ZuwuTV, the start-up product manager used secret cryptocurrencies to buy drops before they appeared on the OpenSea homepage, selling them shortly after they were publicly highlighted by OpenSea and redirecting profits to their main account. Users linked to a handful of transactions from accounts linked to the executive of the public blockchain, including a drop in NFT that, at the time, was actively listed on the front page of the platform.
Today, OpenSea seemed to acknowledge the incident and said in a blog post that it had “learned that one of our employees was buying items they knew they had to show on our front page before appearing in public.” The company did not identify the employee but said they were conducting an “immediate” review of the incident. The launch, which was recently valued at $ 1.5 billion after raising $ 100,000 million from Andreessen Horowitz’s Series B, added to the blog post without signing that this 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,” said Devin Finzer, CEO of OpenSea. tweet.
OpenSea, which hit a record $ 3.4 billion in transaction volume last month, appears to have no rules in certain places that prevent employees from using confidential information to buy or sell NFT on its own platform to its own users. The company detailed that it was now implementing a policy that team members could not buy or sell “to collections or creators while presenting or promoting them” and that they are “prohibited from using confidential information to buy or sell any NFT , whether or not available on the OpenSea platform “.
Most NFTs are not generally assumed to be securities, despite the SEC’s lack of official guidance on the class of cryptographic assets. Some in the space have questioned whether different buying and selling mechanisms, along with ongoing reward structures, can push some NFT sales into the securities territory.
“Many have been drawn to dramatic jumps in the value of new digital assets,” Senate Banking Committee Chair Sherrod Brown said at a hearing yesterday, according to The Block, where the relationship between cryptographic markets and the application of the SEC. “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, all too often, someone’s quick profits go to the expense of workers and entire communities. ”
We contacted OpenSea for further feedback.