A former OpenSea executive who resigned from the marketplace in September 2021 due to allegations of insider trading is back in the NFT space
Insider Trading in the Age of NFTs
Insider trading is when a person or organization gets trading information that the general public doesn’t have access to. For decades, we’ve witnessed insider trading in the financial markets and related industries, and until recently, it wasn’t a significant problem in the NFT space.
As the NFT industry got more prominent, it was only a matter of time until the first major NFT-based insider trading scandal happened. In September 2021, an insider trading scandal compromised Nate Chastain, OpenSea’s former head of product.
After the incident in 2021, Chastain laid low for a while, but now he’s finally back and looking to re-enter the NFT space in a more prominent position.
Insider trading was bound to occur in the NFT space, and as the largest NFT marketplace, OpenSea was the most likely target. For some reason, insider trading has become engraved in human behavior. It doesn’t matter how but as a company or sector grows, someone will find a way to get forward illegally through insider trading.
One thing that the NFT ecosystem has working for it is that the space hasn’t been infected with insider trading and nefarious activities to the point of no return. Failure to get insider trading and other nefarious activities under control may mean that the NFT space ends up like Wall Street.
After months of laying low, Nate Chastain creeped out the woodworks with plans for his NFT marketplace. According to pitch materials viewed by many news platforms, including CoinDesk, Oval is looking to raise $3 million in seed funding at a pre-money valuation of $30 million.
The $3 million seed fund pitch deck is from February 2022, but an earlier version shows the company trying to raise $7.5 million at a pre-money valuation of $50 million. What this means is that since the endeavor launched, the team behind Oval has had to scale back aspirations.
From a valuation of $50 million to $30 million, things are not looking good for Oval, and it’s not apparent if the company has had any takers for its offer. If Oval fails to raise money, they may be forced to seek less money at a lower valuation than they believe they’re currently worth.
The Future of Oval Marketplace
Oval is attempting to debut in an oversaturated NFT marketplace space, and the fact that one of its co-founders doesn’t have the best reputation in the NFT space will not help the company as it attempts to launch.
Oval wants to build a “personalized platform for collecting NFTs” to make it easier for users to discover NFTs by “providing them with more context and control over NFTs than any other consumer platform.”
Admittedly Oval is trying to solve a problem that exists, and if the product works, it’ll help personalize the NFT experience through algorithm recommendations.