A type of insider trading has taken place on Opensea, one of the most important trading platforms for NFT tokens. As platform boss Devin Finzer admitted, one of his employees used the knowledge about when certain tokens are prominently placed on the Open Sea homepage. The unnamed person then bought the tokens before they were placed, probably in the hope of subsequent increases in value.
In his communication Finzer spoke of great disappointment and stressed that this behavior did not correspond to the values of his team. He had commissioned an investigation into the case by a third party. In addition, new rules would be set according to which the Opensea workforce would not be allowed to buy or sell tokens from ongoing promotions. They should also be prohibited from buying NFTs about which they have confidential information.
Allegations on Twitter
Previously, there had been allegations on Twitter against Opensea’s current Head of Product Nate Chastain, reports the cryptocurrency magazine The Block. Why does it seem that Chastain is buying up NFTs with some wallets before the homepage placement and then selling in the middle of the hype with increased prices, asked a user, referring to transaction data. Chastain is the owner eines Cryptopunk-NFTs known, which means that one of his Ethereum addresses is also public. This enabled others to understand his transactions and put him under suspicion, writes The Block.
Opensea is one of the most important platforms in the still booming NFT business. According to the company’s own information, transactions worth over 2.3 billion US dollars were processed on the marketplace last August alone. At the end of July, the company also announced a new round of financing with $ 100 million in fresh venture capital that it plans to put into further growth. The startup is currently valued at $ 1.5 billion.
NFT hype continues
Non-fungible tokens, or NFTs for short, are crypto-money technology. The hash of a data package that is signed by the author of the original file on a blockchain infrastructure with their private key can be managed in a publicly traceable manner with such tokens. The idea behind it is to create digital uniqueness. The blockchain certificate should, so to speak, be proof of owning the virtual original. The Ethereum platform is often used for tokenization, which has special standards for such tokens with ERC-721 and ERC-1155.
However, an NFT does not prevent anyone from simply copying the associated digital content. Also, such a certificate has so far not been legally valid in the blockchain that could be sued anywhere. Nevertheless, the tokens are a million dollar business, especially in the art scene. The previous record was set by the auction of a digital work of art by the artist Beepl, which was auctioned for 69 million US dollars through the Christie’s auction house.
For 5.4 million US dollars, Sotheby’s also sold an NFT on a data package with the source code of the World Wide Web. Last week, an NFT collection of 101 monkey cartoon pictures from the digital collection picture series “Bored Apes Yacht Club” was sold for 24.4 million US dollars via Sotheby’s to unnamed bidders.