Iconic basketball star Shaquille O'Neal is facing trial in a Miami court for his role in promoting the Astrals NFT project.
Basketball legend Shaquille O'Neal is facing a class-action lawsuit over his involvement in promoting the Astrals NFT project, which is accused of offering unregistered crypto securities.
In a recent development, a Miami court dismissed a claim that O'Neal had a "controlling person" role in the Astrals project, which would have suggested he had actual power over the venture's operations. However, the court did determine that O'Neal acted as a "salesperson" who successfully solicited the purchase of Astrals-related products.
The Astrals project, built on the Solana blockchain, featured a collection of 10,000 three-dimensional avatars that could be used as virtual identities, along with a governance token called Galaxy, intended for use within a decentralized autonomous organization (DAO) that incubated innovative projects.
O'Neal, who became the face of the project, promoted Astrals NFTs on various platforms, urging investors to join in early and highlighting the potential benefits of the venture.
Even after the collapse of the FTX crypto exchange in November 2022, which reportedly wiped out his equity in the exchange, O'Neal continued to show his support for Astrals in channels like Discord, before he is said to have left the venture, leading to a drastic drop in the value of Astrals financial products.
The plaintiffs in the class-action lawsuit 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.
The court's decision not to accept the claim that O'Neal had direct control over Astrals is significant, as it limits his potential legal liability in the case.
However, the court did accept the argument that Astrals' NFTs and Galaxy tokens could be considered unregistered financial securities, setting the stage for O'Neal to respond to this allegation in the coming weeks.
This Miami court ruling could have a broader 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 is also notably representing 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.
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