TL;DR
- A Miami court has dismissed the allegation that Shaquille O’Neal had control over the Astrals NFT project.
- The court found that O’Neal acted as a salesman, promoting the purchase of Astrals products.
- The lawsuit is ongoing, and O’Neal must respond to the allegations by September 12, 2024.
Iconic basketball star Shaquille O’Neal is facing trial in a Miami court for his role in promoting the Astrals NFT project.
Although the court dismissed the allegation that O’Neal had a “controlling person” role in the project, which would imply that he had actual power over Astrals’ operations, it was determined that he acted as a “salesperson” who successfully solicited the purchase of Astrals-related products.
This decision comes in the context of a class-action lawsuit accusing Shaquille O’Neal of promoting the sale of Astrals tokens and NFTs, which are alleged to be unregistered securities.
The Astrals project, based on the Solana blockchain, included a collection of 10,000 three-dimensional avatars that could be used as virtual avatars, as well as a governance token called Galaxy, intended to be used within a decentralized autonomous organization (DAO) that incubated innovative projects.
O’Neal, who served as the face of the project, promoted Astrals NFTs on various platforms, urging investors to join in before it was too late.
Even after the collapse of the FTX crypto exchange in November 2022, he continued to show his support for the project on channels such as Discord, before reportedly leaving Astrals, leading to a drastic drop in the value of Astrals financial products.
The plaintiffs allege that O’Neal, whether aware or not of the potential regulatory issues surrounding the sale of unregistered crypto securities, widely promoted the project to his large following.
However, the court did not accept the allegation that O’Neal had direct control over Astrals, an argument that could have significantly increased his legal liability.
Despite this, the court held that Astrals’ NFTs and Galaxy tokens could be considered unregistered financial securities, and O’Neal is due to respond to this allegation in the coming weeks.
Implications for future lawsuits over NFTs
The Miami court’s ruling could have a significant impact on other litigation involving cryptocurrency and celebrity endorsements, as it is one of the first major decisions to address this issue in detail.
Investors’ attorney Adam Moskowitz, who also represents plaintiffs in cases against FTX, Voyager and Binance, suggested this ruling could bring clarity to other pending class action litigation.
As key dates approach, it remains to be seen how Shaquille O’Neal and the Astrals project will respond to the remaining allegations.
The court’s decision on whether Astrals’ NFTs and tokens are unregistered securities could set a precedent in the growing intersection between the world of cryptocurrency and celebrity endorsements.
With a deadline to respond set for September 12, 2024, attention will remain focused on this case as it moves through the court system.
