In a development that puts to doubt a lot of things that are happening in the NFT world, it has been shown that the Head of Operations at the NFT marketplace OpenSea has been using his position and access at the platform to pump his own NFTs to make profits unethically.
NFTs are the latest craze in the crypto world and we have seen 1000s of NFTs, across art and other fields, flooding the market over the last couple of months and investors and traders lapping them up mainly for the sake of speculation and looking to make some quick profits by swapping them around. Many traders have been successful in this which has only furthered the FOMO surrounding the NFT industry while not many were aware of the dark underbelly of the same. Now that the NFT market is cooling down, responsible community members are pointing out the flaws within the system that have been exploited by people within the system itself.
One such flaw was revealed by users who noted that the OpenSea employee Nate Chastain was buying up cheap NFTs into his wallets and then pushing such NFTs into the home page of the largest NFT platform to make it more visible and increase its demand and sold them at a quick profit as the demand and price increased. It was noted that this was happening for quite a few days across 10s of transactions and this issue was raised by users on social media. Though there is nothing illegal, this is quite similar to insider trading in the stock market world and hence was considered highly unethical.
Though initially, these were merely allegations on social media (with associated proof), it became a reality a few hours later as OpenSea stated in this regard where it acknowledged the allegations and promised to do a detailed review of the processes and the incident to get a full understanding of the problems and also to take steps to tackle the issue. The company also said that its employees are not allowed to buy and sell NFTs and are also not supposed to be using confidential information, like the demand behind specific NFTs which is something that they are privy to, to profit from their sale. It remains to be seen what action OpenSea would be taking against Nate and whether this revelation, probably the tip of the iceberg, is going to affect the NFT craze in any way.