OpenSea Accused of "Dirty Shilling" for NFT Project FATZUKI Despite 4-Month Inactivity

OpenSea has been accused of "dirty shilling" for FATZUKI, an NFT collection inspired by Azuki that has been inactive since late July 2023. The platform initially published and then removed a post about FATZUKI.

OpenSea's "Dirty Shilling" for NFT Project FATZUKI. Source: X (Twitter)

On the morning of November 26, NFT investors on X (Twitter) shared a post showing that OpenSea, with its 2 million followers, had promoted FATZUKI, a collection derived from Azuki.

However, as highlighted by prominent on-chain investigator ZachXBT, FATZUKI's media channels have not been updated since July. He accused the Azuki Twitter account of intentionally using its influence to "pump" the NFT collection’s value, creating liquidity for others to "exit."

Another user documented a surge in FATZUKI sales transactions following OpenSea’s promotion.

According to CoinGecko data, the floor price of FATZUKI spiked sixfold after OpenSea's post, though the 24-hour trading volume only reached just over $18,500.

NFT FATZUKI Price History from July 2023 to Present. Source: CoinGecko (26/11/2023)

FATZUKI is a derivative NFT collection from Azuki, a renowned "blue-chip" in the NFT investment community. The collection launched in June 2023 during a period when Azuki was embroiled in the Elementals controversy. The new collection faced criticism for having many similarities to the original NFTs, causing frustration among investors who felt the project was diluting the value of the original collection.

FATZUKI was intended to showcase the team's claim that minimal creativity could innovate the collection in new directions. However, Azuki’s reputation significantly declined post-Elementals, as reflected in the collection’s floor price.

Azuki Floor Price Volatility from May 2023 to Present. Source: CoinGecko (26/11/2023)

Immediately following OpenSea’s post, FATZUKI’s X (Twitter) account published its first update since July 24, claiming it had been "resting" during this period.

In the past, OpenSea faced accusations of insider trading. Former OpenSea executive Nate Chastain used confidential information to purchase NFTs before they were listed, profiting tens of thousands of dollars. The case led to Chastain’s arrest and conviction, marking the first insider trading case in the crypto and NFT industry.

Recently, OpenSea has faced numerous issues. In early November, the NFT marketplace announced a 50% reduction in its workforce amidst market share losses to competitor Blur. The company's valuation reportedly dropped by 90%, from $13.3 billion in 2021 to just $1.3 billion.

As of the time of writing, OpenSea has not provided an updated explanation for its promotion of FATZUKI, which was subsequently removed following community backlash.