NFT Marketplace Admits Employee Used Insider Information to Buy Collectibles

One of the largest marketplaces for trading NFTs is embroiled in controversy. Spotted in a blog post by , Open sea on Wednesday that one of his employees, Nate Chastain, had purchased NFTs that he knew the company intended to appear primarily on its platform.

The admission came after a Twitter user named Zuwu this week of using secret Ethereum wallets to buy NFT drops on the front page before they were available for the public to buy, then later selling them for a profit after the inevitable surge in interest.

OpenSea called the incident “incredibly disappointing” and said it is investigating what happened. “We want to make it clear that this behavior does not represent our values ​​as a team,” the company said. “We are taking this very seriously and are acting immediately and thoroughly on this incident so that we have a full understanding of the facts and additional steps we need to take.”

The company notes that it has already implemented two new policies to prevent these types of incidents in the future. Going forward, OpenSea employees may not buy or sell collections and creators while promoting them. They are also not allowed to use confidential information to buy and sell NFTs on OpenSea and elsewhere.

Understandably, the incident has caused quite a stir among the company’s customers, with some . Most importantly, the episode shows how a wild west the NFT market is right now. according to an analysis by business law firm McMillan, there are currently no laws in the US or Canada regulating the sale of NFTs. This incident may prompt the Securities and Exchange Commission to change that.