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Insider NFT Trading at OpenSea: Regulation Imminent?

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TL; DR Breakdown

  • OpenSea Executive Chastain under fire for insider trading.
  • Unhappy NFT collectors have taken shots at OpenSea, among other issues.

The head of product development, Nate Chastain, at OpenSea, which is one the largest NFT marketplace in the world, has come under fire for using insider information in NFT trading. The NFTs were bought before they were featured on the platform and later sold when their value soared to make profits. They were doing quite well as the number of transactions surged since July.

OpenSea admits this is ‘incredibly disappointing”

OpenSea appears to have confirmed the accusations that Nate Chastain used insider information on the platform for NFT trading when they were promoted and returned profits to his public wallet. On-chain data suggests Chastain, using confidential information, could buy NFTs before they were announced on the homepage and helped him make huge profits.

NFTs tend to jump in value when they or the artists are promoted on the homepage of OpenSea. Allegedly, Chastain knew that certain NFTs were listed on the homepage and used this information to trade NFTs.

Twitter user Zuwu posted a message indicating that they had analyzed on-chain data; that is when the crypto community first became aware of Chastain’s activities. The Twitter post accused Chastain of buying NFTs ahead of homepage listings by using “a few secret wallets.”

A more recent development is that Nate Chastain resigned today from his post as product head, according to OpenSea. Although Chastain has not replied to confirm, his Twitter status shows OpenSea as a past status.

Insider NFT Trading at OpenSea: Regulation Imminent? 1
Source: Twitter

I think we all say that coming, and I’m happy it happened. What I’m not happy about is people still tagging him and harassing him to resign and attacking him in a toxic manner. He faced his consequences. Meme all you want, but no toxic bs

Zuwu

Mark Cuban says about the matter:

Any discussion of crypto regulation has to start with the facts that there are already laws against fraud and that “crypto” is not monolithic. There are many layers to “crypto” here are my thoughts and all are subject to change as I learn more

Mark Cuban

Other Twitter users also responded to the threat, and it soon became apparent that someone had been “flipping” NFTs, and the profits were being returned to Chastain’s public address. Using another address linked to Chastain, NFT were bought just minutes before they were listed on OpenSea’s homepage. The profits were then returned to Chastain’s public account.

The transaction history for the featured NFTs exists as proof of what happened. The NFT Spectrum Of A Ramenfication by Dailydust was bought by the other address, linked to Chastain’s, for 0.25 ETH at 5:05 UTC on Sep. 14. A few minutes later, OpenSea promoted the NFT on their Twitter account. The price of Spectrum Of A Ramenfication jumped immediately after the Twitter post. Making a profit of 500%, the NFT was sold for 1.5 ETH at 5:26 UTC.

The address was also used to buy and sell other Dailydust’s NFTs for similar returns, and just minutes later, the address sent 7.1ETH to Chastain’s public address.

New Policies for NFT Trading?

OpenSea published a blog post to confirm that an employee had used insider information to trade NFTs. OpenSea is conducting an “immediate and thorough” review of this incident and added that team members would not trade NFTs from featured or promoted collections.

Nevertheless, the news has raised concerns of market manipulation, centralization, and lack of transparency over the criteria for listing a project on OpenSea’s homepage. In addition to that, NFT collectors have taken shots at OpenSea. The 2.5% trading fee the platform charges, search functions, and categorizations were also among the issues highlighted.

Following up on this development, one wonders if smart contracts (SCs) are the most likely source of fraud due to intentional omissions, undisclosed actions, and lack of clarity by users. Should SCs need to be approved first? What regulation body will handle fraud reports and certify audits to prove lack of fraudulent intent?

While OpenSea remains the biggest marketplace for NFTs, it remains to be seen how they will ensure that such events do not occur in the future. Read about another OpenSea issue here.

Should NFT trading be regulated by a third party? Please give us your opinion in the comments below.

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Source: https://api.follow.it/track-rss-story-click/v3/tHfgumto13CuvT_WufSKZFyOSYGFl6uu

Blockchain

DraftKings Doubles Down, Partners With Polygon

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Yes, it was just a few short months ago that DraftKings launched the ‘DraftKings Marketplace‘ in partnership with Autograph.io. In that short time, we’ve seen the sports gambling powerhouse churn out some successful NFT releases with the likes of Tiger Woods, Simone Biles, Tom Brady, and more.

Now, DraftKings is doubling down on crypto, this time pairing up with Polygon for some versatility and support in secondary-market transactions.

DraftKings & Polygon: A Prime Pair

Scalability and sustainability are two traits that Paul Liberman, co-founder and president of global product and technology at DraftKings, cited as “critical challenges of blockchain technology” that Polygon was able to address to meet DraftKings’ needs. According to the press release, the company will also have an option to potentially contribute to Polygon’s governance protocol and keep the network secure as a validator node with its own stake pool.

Polygon will hone in on custom NFT drops and secondary-market transactions.

The marketplace is available for millions of DraftKings’ users, and the platform is currently working towards transferability of NFTs to decentralized wallets via Ethereum mainnet. Meanwhile, Polygon has continued to show investment in NFTs, gaming, and corresponding areas. Existing partners for Polygon include the likes of Atari, ZED RUN, Decentraland, The Sandbox, and more.

“Although DraftKings Marketplace is still in it’s nascency, we are bullish on the possibilities that blockchain, NFTs, cryptocurrency and more will present as we prepare for Web 3.0 alongside Polygon and the new innovations ahead for digital collectibles,” added Liberman. A refreshing take from brand executives that shows the immense potential ahead for crypto in online gaming and gambling.

Polygon continues to solidify partners to build further investment in gaming and NFTs. | Source: $MATIC on TradingView.com

Related Reading | Crypto Scammers Take Over Dating Apps Users’ iPhones

Gaming, Gambling & Crypto

The emergence of young industries stateside, such as sports gambling and cannabis, are prime contenders for crypto integration – and this move for DraftKings is a prime example. They are also industries that are on the rise throughout the US in particular.

Reports emerged this week that New Jersey was the first state to hit a $1B month of bets last month. The first online sports betting entrant in the state was none other than DraftKings, who partnered with Resorts Digital; that partnership yielded nearly $42M last month, leading the online-only handle in the state.

All that to say that DraftKings is one of the largest players in the game, publicly traded with a valuation north of $20B.

Many platforms are targeting the crossover of gambling, gaming and crypto. Polymarket, for example, describes itself as an “information markets platform” that runs on Ethereum, where users can place bets on sports and current events.

Related Reading | Who Funds Bitcoin Core Developers? Here Are The Facts

Featured image from Pexels, Charts from TradingView.com

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Source: https://bitcoinist.com/draftkings-doubles-down-partners-with-polygon/?utm_source=rss&utm_medium=rss&utm_campaign=draftkings-doubles-down-partners-with-polygon

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Blockchain

Anthony Scaramucci Sees Bright Future as First US Bitcoin Futures ETF Makes NYSE Debut Following Positive Nod from S.E.C.

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In Tuesday morning trading, the ProShares Bitcoin Strategy ETF (NYSE: BITO) made its debut, marking a monumental occasion in the developing story of cryptocurrency regulation. The fund, which tracks CME bitcoin futures, or contracts speculating on the future prices of bitcoin, rose by roughly 3% early in the session and continues to hold those gains at time of publishing.

The crypto sector as a whole has pursued a bitcoin-focused ETF for years now, with asset managers submitting proposals for spot bitcoin ETFs as early as 2017. To date, however, the U.S. Securities and Exchange Commission had consistently rejected these proposals, maintaining the stance that none of the applications were able to prove market resistance to manipulation.

While the ProShares Bitcoin Strategy ETF falls short of the spot bitcoin ETF that many in the industry hope is on the horizon, experts agree that Tuesday’s opening stands as a turning point in the regulatory approach of the SEC.

“Remember, there’s a difference between the cash ETF, obviously, and the ETF that everybody’s talking about right now. I have a preference for the cash ETF, but I love the fact that the SEC is allowing for the futures ETF,” Anthony Scaramucci, founder and managing partner of SkyBridge Capital, told CryptoCurrencyWire in an exclusive. “It’s just a sign that they’ve decided that they know the blockchain is going to be a very big component of the future of the financial services industry. I take this as a monumental decision…to allow the United States to stay the leader in financial services globally. I think it’s a very positive sign.”

To stay up to date on the latest cryptocurrency news, signup for the CryptoCurrencyWire newsletter at www.CryptoCurrencyWire.com and for more on SkyBridge Capital & First Trust Skybridge Bitcoin Fund L.P. visit www.SkyBridgeBitcoin.com.

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Blockchain

Traders Start Longing Cardano ($ADA) Over Other Altcoins, Here’s Why

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Cardano ($ADA), the fourth-largest cryptocurrency by market cap seems to have lost market momentum post its Alonzo upgrade in September. The smart contract integration was seen as a key catalyst to its price as $ADA rose to a new all-time high of $3.10 in the run-up to the upgrade. Even though the upgrade made Cardano a Defi and NFT hub, its price hasn’t made much progress since then.

$ADA is currently trading at $2.13 with a 1% loss over the last 24-hours, the altcoin price has fluctuated in the range of $2.10-$2.70 since September. At present Bitcoin is leading the market rally with eyes set of new ATH, while altcoins seem to be in a consolidation phase.  Historically, the real altcoin bull run begins when the $BTC market tops as seen in April-May when the majority of the altcoins hit new ATH.

Cardano
Source: TradingView

The market sentiment towards altcoins looks stable at present, but recent data from Santiment indicate an unusual rise in interest of traders for $ADA, something that was seen during the Alonzo hardfork.

Can Cardano Make a Turn-Around?

Cardano’s social media mentions went through the roof during the Alonzo upgrade, but the hype died down with the successful completion of the upgrade. Many critics believe the September high was the top for the altcoin, however, new data shows traders on Binance is longing $ADA more than other altcoins showing a bullish sentiment in the making.

Cardano
Source: Santiment

The sharp rise in long position is often followed by a bullish price rally for the altcoin and if the trader’s interest continues to mount, it could build a bullish momentum strong enough to help it record new ATHs.

The altcoin had quite a phenomenal year until now having broken into top-3 crypto rankings and currently sitting at third. $ADA with its new decentralized ecosystem is expected to become the go-to option for Defi and NFTs due to the scalability and security that Cardano offers.

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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Source: https://coingape.com/traders-start-longing-cardano-ada-over-other-altcoins-heres-why/

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