In summary
- Shaquille O’Neal has agreed to pay $11 million to settle a lawsuit over the sale of unregistered NFTs tied to his Astrals project.
- O’Neal had actively promoted Astrals NFTs before distancing himself from the project in 2022, leading to the class action lawsuit.
- Astrals faces financial difficulties, with possible bankruptcy and reduced support for its GLXY token due to demand pressure.
Shaquille O’Neal has agreed to compensate investors linked to his controversial NFT project Astrals, who allegedly purchased unregistered securities, according to a court filing on Monday.
Under the proposed settlement, O’Neal and Astrals’ associated entities would pay $11 million in monetary damages, to compensate members of a settlement class and fund legal fees. The deal, subject to court approval, would effectively put an early end to O’Neal’s NFT-related legal issues.
The putative class action lawsuit was filed on behalf of investors who purchased Astrals NFT, which featured 10,000 metaverse-ready avatars based on Solana, or a governance token linked to the GLXY project’s DAO.
“With so many NFT and crypto bankruptcies, these big resolutions happen because such respected individuals, like Shaq, come forward to help other Cryptocurrency victims,” lead attorney Adam Moskowitz told Decrypt. “Shaq was a victim of both the failed Astrals (NFTs) and the FTX platforms.”
The lawsuit claimed that O’Neal had played an active role in promoting Astral NFTs before leaving the project in 2022. During his musical performances as DJ Diesel, he had allegedly stoked interest in the project, linking its success to his status as social media celebrity.
In August, a federal judge in Florida partially dismissed the lawsuit, finding that O’Neal could plausibly be considered a “seller” under securities laws. In what Moskowitz described as “fortunate timing,” it was determined that O’Neal did not have to make “personalized” statements to remain liable, but only had to have a financial motive tied to online posts.
In Monday’s filing, the plaintiffs described the proposed settlement as an “excellent recovery,” noting in part the “current critical financial condition of the Astral entities.”
In late October, Astrals informed community members on Discord that the lawsuit had created unsustainable “financial pressure,” making bankruptcy appear inevitable. As a result, Astrals said it would be forced to begin reducing support for Astrals’ GLXY token, according to the document.
As managing partner of the Moskowitz law firm, Moskowitz has led the charge in other celebrity-focused cryptocurrency lawsuits, notably against FTX promoters. Defendants in that case include legendary American football player Tom Brady and comedian Larry David, who participated in commercials for the collapsed cryptocurrency exchange before it was revealed as a massive fraud.
As the cryptocurrency market trembled on FTX’s trail, O’Neil allegedly made a false promise before distancing himself from the project. “I’m not leaving,” declared a GIF from the movie “The Wolf of Wall Street,” which was posted by O’Neal on the Astrals discord. Supposedly, that was his last post.
While Moskowitz praised O’Neal following the proposed settlement, he once told Decrypt that “the bigger man is hiding from our lawsuit,” referring to the FTX case. Struggling to notify the basketball personality, Moskowitz accused O’Neal of creating a game of cat and mouse.
After several attempts to notify O’Neal, the law firm claimed he had finally been served outside his home last year, only for his attorneys to counterattack and claim the documents were instead thrown into his car. A month later, while broadcasting an NBA game, at what was once known as Miami’s FTX Arena, O’Neal was notified about FTX and its Astrals project.
Before the Astrals lawsuit was settled, O’Neal attempted to have the lawsuit dismissed using novel arguments. For example, its lawyers argued that the digital assets in question were not intended for investors last year, but were instead intended for gamers.
However, the project’s social media presence has decreased due to demand. For example, the last time Astrals (aka X) posted on Twitter was in December 2023.
“Gm Solana,” he wrote the project. “We are still alive.”
Edited by Andrew Hayward
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