NBA legend Shaquille O’Neal has agreed to an $11 million settlement related to the unsuccessful Astrals NFT venture. The basketball icon, alongside his fellow creators, faced a class-action lawsuit filed on May 23, 2024. The complainants claimed that the non-fungible tokens were marketed on the back of O’Neal’s fame, enticing numerous investors who associated the project with his celebrity status. However, once O’Neal distanced himself from the initiative, the NFTs lost market value, resulting in financial setbacks for many backers. This settlement aims to compensate those who invested in these unregistered securities, including the GLXY governance token and NFTs based on the Solana blockchain.
Resolving the O’Neal-Astral NFT Controversy
The lawsuit rooted in O’Neal’s involvement with Astrals was officially lodged in the Southern District of Florida’s Miami Division, spearheaded by lead plaintiff Daniel Harper. O’Neal was served notice during a basketball game at Miami’s Kaseya Center on the same day. Accusations against O’Neal suggest he misled investors by promoting unregistered securities, leveraging the Solana blockchain platform and GLXY governance tokens.
Initially, a Florida federal judge remarked that the NBA superstar might be held accountable under existing securities laws, considering his financial investment and active promotion of the project via social media channels. By August 16, a Miami federal court judge acknowledged O’Neal’s significant involvement in the project’s downfall.
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Astrals Team Faces Financial Struggles
By October, the team behind Astrals confessed to facing severe financial difficulties, hinting at potential bankruptcy. They also announced the discontinuation of support for the GLXY token, citing untenable conditions. By consenting to the $11 million settlement, O’Neal avoids a prolonged and intricate legal struggle. Initially, he had filed a motion to dismiss the class suit, arguing that the digital assets, including the NFTs, were intended for gaming enthusiasts rather than investors.
Celebrity Involvement in Unregistered Digital Assets
Shaquille O’Neal is not alone among celebrities facing legal troubles over digital asset promotions. Reality TV star Kim Kardashian was fined $1.3 million by the Securities and Exchange Commission (SEC) for endorsing EthereumMax. Additionally, Larry David, co-creator of Seinfeld, and football icon Tom Brady were linked to the collapse of the FTX crypto exchange.
Despite these controversies, analysts report a burgeoning NFT market, with sales reaching $356 million in October 2024—an 18% increase from the prior month. Transaction volumes also saw a rise, totaling 7.2 million interactions.
