Hello and welcome to this week's episode of Overbit Insights. In our first story of the week, we'll look at OpenSea, the world's largest NFT Marketplace. It was stated that rumours of insider trading circulated at NFT marketplace, a $1.5 billion start-up.
While the employee was not identified in the letter, OpenSea's head of product, Nate Chastain, was accused on Tuesday evening by Twitter user @ZuwuTV of using secret crypto wallets to front-run purchases on the platform.
According to OpenSea's written response, the occurrence was "incredibly disappointing," and the company is "conducting an immediate and thorough review."
"Chinese blockchain and crypto news platform 8btc traced the sales allegedly associated with Chastain and his front-running scheme, noting a total profit of 18.875 ether, or about $67,000 at today's price." According to Dune Analytics, OpenSea saw a record $3.4 billion in transaction volume last month.
The entire episode exposes the regulatory chasm that exists over significant portions of the crypto economy. NFTs, in particular, operate in legal limbo. They aren't formally classified as securities, and there isn't much legal precedence around digital assets in general; thus, NFT-related insider trading doesn't appear to be prohibited.
The OpenSea scandal, according to London-based fintech data analyst Boaz Sobrado, demonstrates two things: the blockchain's transparency makes it a powerful tool for monitoring nefarious behaviour, given that all trades are public and recorded forever, and, crucially, "regulators aren't doing much" with that information.
"There's a lot of talk about regulation right now, but what a lot of these bad actors are doing right now is clearly illegal." "Regulators' powers do not need to be expanded to combat this type of fraud and misleading statements," Sobrado added.
"I think that regulators don't have their eye on the prize, and pretty much everyone gets away with this," he explained. According to Sobrado, this demonstrates that money has become so loose and schemes have become so brazen that those involved are ignoring the most straightforward precautions to cover their tracks. "This, again, is indicative of the sort of wanton craziness that is going on in the sector right now," he said. "
Moving on to our final story of the day, we take a look at El Salvador, which has risen to third place in the world in terms of Bitcoin ATM installations, according to recent data.
After recognising Bitcoin as legal tender in September, the Salvadoran government built over 200 ATMs. El Salvador now has the third-largest network of crypto ATMs globally, trailing only after the United States and Canada, accounting for 70% of all crypto ATMs in South America.
According to Coin ATM Radar, El Salvador has surpassed the United Kingdom's crypto ATM count after deploying 205 crypto ATMs to date to support local Bitcoin transactions and BTC to US dollar conversions. Compared to Statista data from August 16, El Salvador has successfully built 201 ATMs in just one month.
Previously, the country ranked 43rd on the list, with only four operational crypto ATMs. President Nayib Bukele earlier claimed that the initial assistance for Bitcoin adoption would be provided via a network of 200 ATMs and 50 branches. The Salvadorean government has teamed with Chivo, an in-house cryptocurrency wallet service, to power the country's BTC wallets and ATM usage.
With 27,664 operational machines and 2,790 new machines deployed in September, crypto ATM installations are at an all-time high worldwide. The expansion in El Salvador's ATM construction campaign coincides with a new presidential edict requiring all companies to accept Bitcoin payment. At the same time, other authorities are still debating Bitcoin's utility as a favoured asset, an average of 63.7 ATMs being built internationally every day.
This just shows how robust the industry is becoming.
Thanks for reading, and we'll see you next week.