Shaquille O’Neal’s Astrals NFT Legal Battle Sees Partial Dismissal

A court in Miami has ruled that Shaquille O'Neal, famed for his basketball career, acted as a "seller" but not as a "control person" in relation to his involvement in the Astrals NFT project. The court dismissed some of the allegations in the ongoing class action lawsuit regarding unregistered securities, brought against him in May 2023.

O'Neal’s Role in Astrals Project

Astrals, a Solana-based NFT project, consisted of 10,000 unique avatars designed to attract investment in a virtual world called the Astralverse. The project included a decentralised autonomous organisation (DAO) with its own governance token called Galaxy.

O'Neal's connection to the project involved promotional activities across various online platforms, including a video in which he reportedly claimed the development team would continue to work until the NFT price reached 30 SOL. Despite the collapse of FTX, O'Neal allegedly continued his promotional efforts before distancing himself, which plaintiffs argue contributed to the NFTs’ significant decline in value.

Legal Claims Against O’Neal

The plaintiffs assert that O'Neal either knew or should have known about potential regulatory issues related to unregistered crypto securities. Yet, they allege he continued promoting the Astrals project to his extensive online audience.

The court dismissed claims that O'Neal had "actual power or control" over Astrals. However, Judge Federico Moreno did find that O'Neal acted as a "seller" by encouraging purchases of Astrals products. The judge also rejected the motion to dismiss the notion that Astrals NFTs and Galaxy tokens could be considered financial securities.

Further Legal Proceedings

O'Neal’s legal team has countered these claims by asserting that he neither operated as a seller nor held any control over the project, further arguing that the NFTs and Galaxy tokens do not meet the legal definition of securities.

The court has ordered O'Neal and Astrals to respond to the remaining claims by 12 September.