OpenSea, a major digital marketplace for NFTs, admitted on Wednesday that an employee used insider knowledge to buy highly-valued collectibles before they were prominently displayed on the market’s homepage. Angered traders on social media have compared the incident to insider trading.
The OpenSea marketplace is a main destination for NFT buyers online, with billions of dollars in value trading hands weekly. It’s one place where you might buy a pixelated CryptoPunk for as much as a house in order to flex on social media, or a Bored Ape. The site works like an auction house, and items in collections are bid on by the public once they go live. Some collections are given the coveted spot of promotion on the site’s homepage, a process that involves NFT creators tagging OpenSea on social media and having the submissions reviewed by staff.
The trouble began on Tuesday night, when a Twitter user accused OpenSea head of product Nate Chastain of abusing his position to buy NFTs in collections that are slated to be promoted on the homepage and then quickly selling them for a profit.