- A class action lawsuit against basketball legend Shaquille O’Neal’s NFT project Astrals was only partially dismissed on Friday.
A U.S. judge said that Shaquille O’Neal’s legal battle over his Solana NFT project Astrals could proceed on some charges that the basketball icon marketed and sold investors unregistered securities, but a class action case against O’Neal was largely dismissed on Friday.
10,000 metaverse-ready avatars were part of O’Neal’s Solana-based NFT project Astrals, which was connected to the governance token GLXY and a DAO. The case, which was filed last year, centers on O’Neal’s involvement and the potential scope of his promoter liability.
Adam Moskowitz, a general partner at The Moskowitz Law Firm said that the judge’s ruling is a wonderful coincidence and that the case is moving forward full steam.
The Moskowitz Law Firm is representing the plaintiffs in the action. They claim that Astrals’ value plummeted after O’Neal left the project after FTX failed in 2022.
U.S. District Judge Federico Moreno determined that O’Neal may reasonably be regarded as a seller under Section 12 of the Securities Act in the context of securities legislation. The judge mentioned a few things, including the fact that defendant O’Neal’s son serves as Astrals’ head of investor relations and claims that the project’s success is solely due to his notoriety.
Furthermore, Moreno concluded that O’Neal’s marketing of the Astrals project did not necessitate customized or tailored correspondence with potential investors. Instead, the judge determined that O’Neal’s extensive communications, which he frequently made via Twitter, were pertinent to the litigation due to the presence of a pecuniary motive.
According to Moskowitz, the ruling might have an effect on other class action litigation pertaining to cryptocurrency in which billions of dollars in damages are at stake. These include the FTX and Voyager cases that David Bois and The Moskowitz Law Firm are pursuing.
Moskowitz characterized Moreno’s decision as “a very expansive ruling.” Promoters such as the MLB, NBA, and Tom Brady contend that in order to establish a section 12 case, proof that each individual heard the [promotional] statement is required.
The court did, however, reject a contention that O’Neal was accountable for marketing and selling unregistered securities in violation of the control person definition. The plaintiffs in the action have to assert that O’Neal was actively involved in Astrals’ daily operations in addition to social media promotions for that claim to be allowed to move forward.
According to Moreno, the new complaint unequivocally states that O’Neal created the Astrals initiative, put together a management team, and his work was crucial. That being said, it is untrue to say that someone who is a founder automatically has control.
Before the court’s ruling on Friday, O’Neal’s counsel had attempted to have multiple allusions to FTX removed from the lawsuit. O’Neal was one of the company’s celebrity endorsers before the cryptocurrency exchange crashed in November 2022 after appearing in a commercial.
Moreno refused a motion to remove any references to the insolvent exchange since O’Neal was on an episode of The FTX Podcast and Astrals’ staff supposedly guaranteed the project’s community that O’Neal’s involvement would continue despite FTX’s implosion.
Moskowitz had said that the case was not moving forward because he was playing a game of cat and mouse with one of the greatest figures in the NBA.
When O’Neal was eventually served outside his home, his attorneys argued that papers had actually been hurled at his car. O’Neal eventually received notice in connection with the Astrals and the FTX case while hosting an NBA game at the location of the former FTX Arena in Miami.
The NBA legend is due to reply to the lawsuit’s allegations by September 12 as the case moves forward with O’Neal’s request largely dismissed.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
