Emily Walker
NBA legend Shaquille O’Neal has agreed to a settlement of $11 million related to the unsuccessful Astrals NFT venture.
O’Neal and his collaborators on the Astral NFTs were named in a class action lawsuit filed on May 23, 2024. The plaintiffs claimed that O’Neal’s fame led many investors to purchase these tokens, believing in their potential due to his involvement.
However, when O’Neal distanced himself from the project, the value of the NFTs plummeted, resulting in significant financial losses for the investors.
The settlement will compensate investors who bought these unregulated securities, including the GLXY governance token and Solana-based NFTs.
Shaquille O’Neal has settled for $11 million after a lawsuit from investors in the failed Solana-based NFT project, Astrals.
— Sherwood News (@sherwood_news) November 19, 2024
Settlement Provides Resolution for O’Neal-Astral NFT Case
The class action lawsuit concerning O’Neal’s ties to the Astral project was launched in Florida, with Daniel Harper leading as the plaintiff. O’Neal was officially served with legal notice during a basketball event at the Kaseya Center in Miami.
The plaintiffs accused O’Neal of misleading investors by offering unregistered securities through the NFTs and GLXY tokens, asserting that his status contributed to the project’s appeal.
A federal judge in Florida noted that O’Neal’s financial involvement and promotional efforts on social media could categorize him under existing securities laws. This was formalized when a judge recognized his role formally on August 16.
Astral Team Acknowledges Financial Issues
By October, the Astrals team admitted to significant financial challenges, hinting at a potential bankruptcy filing and stating that support for the GLXY governance token would cease as it was no longer sustainable.
By opting for the $11 million settlement, O’Neal sidesteps a drawn-out legal battle. He had previously sought to have the class action dismissed, arguing that the NFTs were aimed primarily at gamers, not investors.
Other Celebrities Face Scrutiny Over Non-Registered Digital Assets
O’Neal is not the only celebrity under scrutiny for promoting digital assets without proper registration. Kim Kardashian faced a $1.3 million fine from the SEC for her promotion of EthereumMax, while Larry David and Tom Brady were involved in the fallout from the FTX crypto exchange bankruptcy.
Despite the controversy, analysts report that the NFT market is actually on the rise, with sales reaching $356 million in October 2024—an 18% increase from the previous month—alongside a rise in transactions, totaling 7.2 million.
Featured image sourced from AfroTech, chart attributed to TradingView