NBA Hall of Famer Shaquille O’Neal has given his nod to an $11 million settlement over the failed Astral’s NFT project.
O’Neal and his co-creators of Astral NFTs were respondents in a class action lawsuit filed on May 23, 2024. The plaintiffs argued that the non-fungible tokens were related to O’Neal’s popularity and that many investors bought the product because of the association of basketball players with the project.
However, when O’Neal tried to distance himself from the project, the NFT’s market value fell, causing many investors to suffer losses.
The settlement The fund will return investors who invested in these unregistered securities, including the governance token, GLXY and Solana-based NFTs.
Shaquille O’Neal has agreed to an $11 million settlement following a lawsuit filed by investors in Astrals, a failed Solana-based NFT project https://t.co/27tkiRDgzd
— Sherwood News (@sherwood_news) November 19, 2024
Settlement will end O’Neal-Astral NFT drama
The class action over O’Neal’s involvement in the Astral project was filed on May 23 in the Southern District of Florida, Miami Division, with Daniel Harper as lead plaintiff. O’Neal was promptly notified of the lawsuit on May 23, during a basketball game at the Kaseya Center in Miami.
According to the plaintiffs O’Neal was guilty of defrauding investors by offering unregistered securities through the Solana-based NFTs and GLXY governance tokens.
A Florida federal judge initially noted that the NBA star could be labeled under existing securities laws. The judge’s observation and initial assessment are based on the player’s financial interest in the project and his active marketing of the project on social media.
On August 16, a federal court judge in Miami formally recognized O’Neal’s role in the failed project.
Astral team admits that they have suffered losses
In October, the Astrals team admitted as much The project is having financial problems and is considering filing for bankruptcy. The team added that it will no longer support the GLXY governance token, explaining that this is no longer feasible.
By agreeing to the $11 million settlement, O’Neal can avoid a complicated and lengthy legal process. O’Neal initially filed a motion to dismiss the class suit, arguing that digital assets (including the NFTs) were designed for gamers and not investors.
More and more celebrities are getting into trouble for having unregistered digital assets
O’Neal isn’t the only celebrity tasked with promoting digital assets and cryptocurrencies. Kim Kardashian was also fined $1.3 million by the Securities and Exchange Commission (SEC) for her endorsement of EthereumMax.
Larry David, co-creator of Seinfeld, and football player Tom Brady were also involved in the bankruptcy of the FTX crypto exchange.
According to analysts, the NFT market is currently growing. NFT sales increased to $356 million for October 2024, reflecting an 18% improvement from the previous month. The number of transactions also increased to 7.2 million.
Featured image of AfroTech, chart from TradingView