Cryptocurrency

Judge Questions Shaquille O’Neal’s Involvement with Astral NFTs

Former professional basketball player Shaquille O’Neal has been named as a defendant in the ongoing Astral non-fungible token (NFT) class-action lawsuit. The lawsuit, which has been ongoing for over a year, alleges that the NFTs are unregistered securities that O’Neal once promoted online.

Table of Contents

Background on the Lawsuit

The lawsuit was initially filed in May 2023 and claimed that the NFTs are unregistered securities that O’Neal promoted online. The plaintiffs alleged that O’Neal urged investors to "hop on the wave before it’s too late" and stated that the team would develop the project until it reached a floor price of 30 Solana (SOL) – worth about $90 when the collection launched in March 2022.

Judge’s Ruling

In an August 16 order on O’Neal’s motion to dismiss, Miami federal court judge Federico Moreno ruled that the plaintiffs had properly alleged that O’Neal was a ‘seller’ of the Astrals NFT project. This means that O’Neal will need to answer for promoting the NFTs.

However, Judge Moreno knocked back a claim that O’Neal was a person with control over the project. The judge wrote that the lawsuit had "sufficiently alleged that Astrals and Galaxy tokens are ‘securities’ subject to federal securities laws."

Plaintiffs’ Allegations

The plaintiffs claimed that O’Neal hadn’t posted to the project’s Discord after he said he was "NOT F***ING LEAVING" after FTX collapsed. They also alleged that O’Neal later left the project, which caused the value of the Astrals NFTs and Galaxy token to plummet.

Defense Argument

O’Neal’s lawyers had argued that the case should be dismissed, claiming that O’Neal is neither a ‘seller’ nor a ‘control person’ of the project. They also argued that the NFTs and the Galaxy token are not securities under United States law.

Current Status

O’Neal has until September 12 to respond to the claims in the suit. However, his counsel did not immediately respond to a request for comment. O’Neal could not be reached for comment.

Impact on the NFT Market

The floor price of the Astrals collection currently sits at 0.106 SOL – worth about $15.50, according to NFT marketplace Magic Eden. The project features 10,000 NFTs, a metaverse called Astralworld, and a decentralized autonomous organization (DAO) with a governance token called Galaxy.

The Astrals project has been affected by the collapse of FTX, which was a major player in the Solana-based ecosystem. The value of the Astrals NFTs and Galaxy token plummeted after FTX collapsed, causing many investors to lose money.

Relevance to the NFT Industry

The lawsuit against Shaquille O’Neal highlights the ongoing issues with the regulation of non-fungible tokens (NFTs). Many experts believe that NFTs are unregistered securities and should be subject to federal securities laws. However, the industry is still in its early stages, and there is a lack of clear regulations.

The Future of NFTs

As the NFT market continues to grow, it’s essential for regulators to establish clear guidelines for the industry. Many experts believe that the regulation of NFTs will follow the same path as initial coin offerings (ICOs) and other cryptocurrencies. However, the future of NFTs remains uncertain, and many are still waiting for clarity on how they will be regulated.

Conclusion

The lawsuit against Shaquille O’Neal is a significant development in the ongoing debate about the regulation of non-fungible tokens (NFTs). As the industry continues to grow, it’s essential for regulators to establish clear guidelines for the industry. The future of NFTs remains uncertain, and many are still waiting for clarity on how they will be regulated.