Former NBA superstar Shaquille O'Neal has been named in a proposed class action lawsuit over his involvement and promotion of the Solana-based NFT project - Astrals.
Astrals NFT Project
The basketball legend is facing legal trouble for his crypto dealings yet again. This time, it is over his involvement in the Astrals NFT Project. According to the class action lawsuit filed in a federal court in Florida, O’Neal sold unregistered Astrals tokens, which violates securities laws.
O’Neal launched the Astrals Project back in 2022, along with his music manager Brian Bayati as CEO and his son Myles O’Neal as the head of investor relations. Under the project, users could mint and collect NFTs, which allowed them to interact with each other in a virtual world by creating unique and tradable avatars. These NFTs were also available for purchase on an official Astrals token marketplace.
Shaq Pushed Astrals Pretty Hard
Although O’Neal had already been dabbling in the crypto sphere before this project, his involvement was more intrinsic to the Astrals project. His past experience in various Ethereum projects also added to his credibility.
The lawsuit highlights O'Neal's active promotion of the Astrals Project. He introduced a series of NFTs known as the "Shaq Signature Pass," claiming that only 50 of them would ever exist and could be earned by community participation or bidding on Astral tokens. O'Neal extensively promoted Astrals NFTs on his social media accounts, encouraging investors to "hop on the wave before it's too late."
Allegations And The Howey Test
As a test of whether O'Neal sold unregistered securities, the lawsuit references the Howey Test, a legal standard established in a 1946 Supreme Court case. This test assesses whether a transaction qualifies as an investment contract, considering factors like the investment of money into a common enterprise with an expectation of profits from third-party efforts.
The lawsuit contends that Astrals NFTs meet all the criteria to be classified as securities. Adam Moskowitz, the lawyer representing the lead plaintiff, Daniel Harper, addresses the issue of regulatory clarity in the crypto industry. He argues that securities regulation is intentionally broad and all-encompassing, emphasizing that precision is not the goal. This stance reflects the ongoing challenge of defining the regulatory framework for cryptocurrencies and related assets.
Shaq’s Other Crypto Troubles
Shaquille O'Neal is not new to legal battles in the crypto sphere. He has been named as a defendant in a lawsuit against Sam Bankman-Fried, the founder of FTX, and other celebrities who endorsed the platform, even though O'Neal distanced himself from the company by claiming he was "just a paid spokesperson."
A dispute has arisen in the FTX case regarding O'Neal's alleged evasion of being served legal papers. Lawyers for the investors claim to have made multiple attempts to serve him, while O'Neal denies these accusations.
The lawsuit against O'Neal underscores the increasing scrutiny surrounding celebrity involvement in the crypto space and the broader challenges of regulating digital assets.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
