OpenSea product lead resigns over use of insider NFT info for purchases

The marketplace hopes to prevent further abuse through tighter controls.

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Jon Fingas
September 16th, 2021
OpenSea logo displayed on a phone screen and representation of cryptocurrencies are seen in this illustration photo taken in Krakow, Poland on August 26, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Jakub Porzycki/NurPhoto via Getty Images

OpenSea isn't wasting much time after its head of product was accused of exploiting insider information to turn a profit on non-fungible tokens. The marketplace has asked for and accepted Nate Chastain's resignation following claims he used secret Ethereum wallets to buy front-page NFT releases before they were available to the public. Chastain's reported actions broke a promise to foster the NFT market "responsibly and diligently," OpenSea said.

The company also tapped an unnamed third party to review its approach to unethical behavior and recommend changes. OpenSea promised to "quickly" implement any recommendations. It had already launched policies barring both the use of confidential info for NFT trading and for buying or selling from promoted creators and collections.

Chastain might not face further repercussions. As the law firm McMillan noted in a recent analysis, there aren't any laws in North America regulating NFT sales. This incident and the response do set expectations for other NFT marketplaces, though, and they might invite more regulation from governments that otherwise left NFTs untouched.

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