Key Insights
- U.S. court partially upholds lawsuit against Shaquille O’Neal over his involvement in the Astrals NFT project.
- Court dismisses claims of O’Neal being a “control person” but upholds his role as a “seller” in the project.
- The ruling could have significant implications for celebrity endorsements in cryptocurrency and NFT projects.
MIAMI (MarketsXplora) – A U.S. District Court has issued a mixed ruling in a class action lawsuit against former NBA star Shaquille O’Neal over his involvement in the Astrals NFT project, according to court documents filed on Friday.
The lawsuit, filed in the Southern District of Florida, Miami Division, centers on O’Neal’s role in promoting Astrals, a project featuring 10,000 3D avatar non-fungible tokens (NFTs) and a decentralized autonomous organization (DAO) for incubating innovative projects.
While the court dismissed allegations that O’Neal was a “control person” in the project, it upheld claims that he acted as a “seller” by successfully soliciting purchases of the NFTs. The ruling stated that O’Neal’s involvement met the legal definition of a seller, despite his arguments that he was not an officer or director of the company.
The lawsuit alleged that O’Neal actively promoted the project, urging investors to “hop on the wave before it’s too late.” Even after the collapse of cryptocurrency exchange FTX in November 2022, O’Neal reportedly posted a GIF on Discord from “The Wolf of Wall Street” declaring, “I’m not F***ing Leaving.”
However, the plaintiffs claim that O’Neal subsequently abandoned the project, leading to a plummet in the value of Astrals’ financial products.
Significantly, the court did not dismiss allegations that Astrals sold tokens which were unregistered “securities,” a point that could have broader implications for the crypto industry.
Adam Moskowitz, the attorney representing the investors in this case and in other high-profile crypto lawsuits including those against FTX, Voyager, and Binance, hailed the ruling as potentially groundbreaking. “We are extremely fortunate that District Judge Moreno authored the first extensive ruling on cryptocurrency and celebrity promotions … bringing clarity and understanding in all of the other crypto class actions litigation,” Moskowitz stated.
The court’s decision could set a precedent for similar cases involving celebrity endorsements of cryptocurrency and NFT projects.
O’Neal and the Astral project are expected to respond to the allegations by September 12, 2024. MarketsXplora was unable to reach O’Neal for comment at the time of reporting.