OpenSea today revealed that one of its executives, whom The Block identified as head of product Nate Chastain, used insider knowledge to buy digital art pieces that were set to be featured on the company's non-fungible token (NFT) marketplace.
NFTs are basically crypto tokens meant to indicate that someone owns a particular artwork. Practically everything has been turned into an NFT: the web's source code, albums, the first tweet, animated GIFs... the list goes on, and the format's popular enough to be propping up the Ethereum mining scene after the London hard fork.
OpenSea has emerged as a popular NFT marketplace, and Chastain was accused of abusing his position by purchasing "items that they knew were set to display on our front page before they appeared there publicly," the company said in a blog post.
An investigation into the accusations is ongoing, OpenSea said, but in the meantime the company's introduced new policies governing its employees' conduct. It said:
- OpenSea team members may not buy or sell from collections or creators while we are featuring or promoting them (e.g. on our home page); and
- OpenSea team members are prohibited from using confidential information to purchase or sell any NFTs, whether available on the OpenSea platform or not.
This is the second time OpenSea's been involved with NFT-related misbehavior in recent weeks. The first was when a collector known as Pranksy bought a fake Banksy for 100 ETH (which was worth approximately $336,000 at the time) via the platform.
"For a new, more open internet that empowers creators and collectors, we will need to bake in trust and transparency into all that we do," OpenSea said. "We’re committed to doing the right thing for our users and earning back the trust of the community we serve."