Shaquille O’Neal Faces Class-Action Lawsuit Over Alleged Securities Violations in Solana NFT Project ‘Astrals

Basketball star Shaquille O’Neal is facing a class-action lawsuit for alleged securities law violations related to his Solana NFT project called ‘Astrals.’ Here’s an overview of the situation:

Astral Project Details:

• Astrals is a community-driven NFT project on the Solana blockchain, consisting of 10,000 unique 3D avatars with distinct features and 16 races.
• The project has two main components: a story-driven play-to-earn role-playing game and a Decentralized Autonomous Organization (DAO).

The Lawsuit Allegations:

• Shaquille O’Neal is accused of abandoning the Astrals project after the collapse of the cryptocurrency exchange FTX, which caused a significant drop in the project’s value.
• The lawsuit claims that the project’s DAO governance token, $GLXY, is unregistered.
• Venture capital firms like MH Ventures and Cypher Capital, which partnered with Astrals as third parties, are also mentioned in the lawsuit.
• The project was closely associated with Shaquille O’Neal’s celebrity status, and his son, Myles O’Neal, was appointed as the project head, indicating a marketing opportunity.

The Legal Proceedings:

• A district judge appointed lead claimants in the class-action lawsuit, represented by the Moskowitz Firm.
• An amended complaint was filed, which alleges that Shaquille O’Neal sold unregistered tokens and had a close association with the project.
• The lawsuit will use the Howey Test, a legal standard, to determine if the NFT tokens were unregistered securities.
• Shaquille O’Neal’s lawyers previously attempted to have the lawsuit dismissed, arguing that the tokens were intended for gamers, not investors, but their motion was denied.
• The lawsuit alleges that Shaquille O’Neal abandoned the Astrals community after the FTX collapse, despite his initial endorsement.

Implications:

• Shaquille O’Neal joins other celebrities like Soulja Boy and Akon who have faced legal action related to their involvement in cryptocurrencies and NFTs.
• The lawsuit raises questions about the regulatory status of NFT projects and the responsibility of celebrity endorsements in the crypto space.

Shaquille O’Neal has until September 29 to respond to the amended complaint. The lawsuit highlights the increasing legal scrutiny and challenges faced by celebrities in the cryptocurrency and NFT markets.