Decentralized technology has not been able to replace Wall Street’s tried-and-true methods of ripping off investors when it comes to extracting money.
OpenSea is the biggest marketplace . On Wednesday , revealed that an employee was secretly purchasing NFTs before they were listed on its frontpage. This non-public information allowed the employee to buy NFTs in advance of their price rises and then make a large profit by flipping them later.
It’s investor front-running but in the digital pixels-art age.
OpenSea Blog Post: “We take this seriously. We are doing an immediate and thorough investigation to determine the facts of the incident and any additional steps that are necessary.”
OpeSea points out that this behavior was not allowed in the company’s internal policies until after it was revealed.
The company stated that OpenSea employees are forbidden from selling or buying NFTs using any confidential information, regardless of whether they were available via the OpenSea platform.
OpenSea was contacted to find out which employee stole confidential information in order to hack its system. We also wanted to know if they were still working at OpenSea. We wanted to know how many NFTs this employee had flipped and what profit they earned doing it.
No immediate reply was received.
The NFT community pointed the finger at Nate Chastain OpenSea’s head of product. Chastain did not respond to our Twitter message.
OpenSea provides investors and collectors with a platform to purchase and sell digital tokens. It is an integral part of the multibillion-dollar NFT marketplace. Notable NFT projects such as CryptoPunks have had sales of as much as $7.5million.
That one of the largest players in the cryptocurrency-adjacent space had a problem with insider data access should come as no surprise. The 2017 statement by the cryptocurrency exchange coinbase regarding insider trading was issued after speculation about price rises in Bitcoin cash just before the exchange launched.
In March 2021 the Commodity Futures Trading Commission stated that an employee of Coinbase had artificially fueled interest in Litecoin. Coinbase’s Director of Engineering was Charlie Lee, the founder of Litecoin. He served as this position from July 2015 through June 2017.
SEE ALSO: You spent millions of dollars on a NFT. These are the actual items you bought.
The old ways still seem to work in today’s complex world of NFTs and cryptocurrency.
Publiated at Wed 15 Sep 2021, 20:28.04 +0000