Shaquille O’Neal’s legal battle in Astrals NFT case sees partial dismissal
Quick Take
- A Florida court dismissed the allegation that O’Neal had wider control over the Astrals NFT project.
- The court ruled that O’Neal’s role in the Astrals NFT project was that of a seller.
A Miami court decided that U.S. basketball icon Shaquille O’Neal was involved in the Solana NFT project Astrals as a “seller” but not as a “control person,” granting O’Neal’s request to dismiss some of the allegations brought against him in the unregistered securities class action lawsuit that started in May 2023.
Astrals, the Solana-based NFT project, featured 10,000 unique three-dimensional avatars that aimed to promote investment in a metaverse-like virtual world called Astralverse and a decentralized autonomous organization (DAO). The project also had its own cryptocurrency named Galaxy, made as the governance token of the DAO.
The court document said O’Neal promoted the project across multiple online channels, including in a video in which he allegedly said that the Astrals team would not stop developing the project until the NFTs reached the price of 30 SOL. Plaintiffs claim that the former basketball player continued to promote the project on various online communities amid the FTX collapse but eventually fled the project, leaving the price of NFTs to “plummet.”
“Plaintiffs claim that O'Neal knew or should have known of potential concerns about regulatory issues concerning the sale of unregistered crypto securities, but nevertheless extensively promoted the Astrals Project to his large following on a multitude of social media platforms,” the document said.
The court dismissed the allegation that the legendary basketball player was a “control person” of Astrals, where plaintiffs claimed that O’Neal exercised “actual power or control” over the project. However, U.S. District Judge Federico Moreno decided that O’Neal was a “seller” who successfully solicited the purchase of Astrals products. The judge also denied the defendant’s motion to dismiss the claim that Astrals NFTs and Galaxy tokens are financial securities.
O’Neal’s legal team has been arguing that he is neither a seller nor a person of control over Astrals and that the Astrals NFTs and Galaxy tokens are not “securities” by law, the document said. The court gave O’Neal and the Astral Project until Sept. 12 to reply to the allegations.
O’Neal did not immediately respond to The Block’s request for comments.
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