Shaquille O’Neal Faces Partial Dismissal in Astrals NFT Case

Court dismisses some claims against Shaquille O’Neal in a securities lawsuit, ruling he was a “seller” in the Astrals NFT project, not a “control person.”

Shaquille O’Neal, a legendary player in American basketball, was granted his request to have certain of the accusations against him in the unregistered securities class action lawsuit that began in May 2023 dismissed by a Miami court. The court determined that O’Neal was involved in the Solana NFT project Astrals as a “seller” but not a “control person.”

Astrals, a Solana-based NFT initiative, offered 10,000 distinct three-dimensional avatars to encourage investment in a decentralized autonomous organization (DAO) and Astralverse, a virtual realm akin to the metaverse. In addition, the project included a cryptocurrency called Galaxy that served as the DAO’s governance token.

According to the court filing, O’Neal advertised the project on several websites, including one where he purportedly declared in a video that the Astrals team would only give up on it once the NFTs were priced at thirty SOL. According to the plaintiffs, the former basketball player kept pushing the idea on several internet forums even after FTX collapsed. Still, he ultimately left, causing the price of NFTs to “plummet.”

According to the complaint, “Plaintiffs assert that O’Neal should have been aware of possible regulatory concerns regarding the sale of unregistered crypto securities, but he nevertheless widely advertised the Astrals Project to his sizable following on various social media platforms.”

The plaintiffs argued that O’Neal had “actual power or control” over the project, and the court rejected their contention that the renowned basketball player was a “control person” of Astrals. But O’Neal was deemed by U.S. District Judge Federico Moreno to be a “seller” who was successful in pressuring people to buy Astrals products. The court also denied the defendant’s attempt to dismiss the allegation that Galaxy tokens and Astrals NFTs are financial securities.

According to the document, O’Neal’s legal team has been protesting that he is neither a vendor nor a person in charge of Astrals and that the Astrals NFTs and Galaxy tokens are not legally classified as “securities.” O’Neal and the Astral Project were given until September 12 by the court to respond to the accusations.