Shaquille O’Neal has agreed to compensate investors tied to his embattled Astrals NFT project, who had allegedly purchased unregistered securities, according to a Monday court filing.
Under the proposed settlement, O’Neal and associated Astrals entities would pay $11 million in monetary relief, to compensate members of a settlement class and finance legal fees. Pending court approval, it would effectively bring O’Neal’s NFT-related legal troubles to an early end.
The putative class-action lawsuit was brought on behalf of investors that purchased NFTs from O’Neal’s Astrals project, featuring 10,000 Solana-based “metaverse-ready avatars,” or a governance token linked to the project’s DAO dubbed GLXY.
“With so many NFT and crypto bankruptcies, these great resolutions happen because such respected individuals, such as Shaq, step up to help the other crypto victims,” lead attorney Adam Moskowitz told Decrypt. “Shaq was a victim of both the failed Astrals and FTX platforms.”
The lawsuit claimed that O’Neal had played an active role in promoting Astral NFTs before abandoning the project in 2022. During musical performances as DJ Diesel, he had allegedly stoked interest in the project, while tying its success to his celebrity status on social media.
In August, a Florida federal judge partially dismissed the lawsuit, finding that O’Neal could plausibly be considered a “seller” under securities laws. In what Moskowitz described as a “fortuitous moment,” it was determined that O’Neal didn’t have to make “personalized” statements to remain on the hook but rather only have a financial motive tied to online posts.
In Monday’s filing, plaintiffs described the proposed settlement as an “excellent recovery,” pointing in part to the “the current dire financial condition of the Astral entities.”
In late October, Astrals told community members on Discord that the lawsuit had created an untenable “financial strain,” which made bankruptcy appear inevitable. As a result, Astrals said it would be forced to start winding down support for Astrals’ GLXY token, according to the filing.
As managing partner of the Moskowitz Law Firm, Moskowitz has led the charge on other celebrity-centered crypto lawsuits, namely against promoters of FTX. Defendants in that case include pro football legend Tom Brady and comedian Larry David, who participated in commercials for the collapsed crypto exchange before it was exposed as massive fraud.
As the crypto market quaked in FTX’s wake, O’Neil allegedly made a false promise before distancing himself from the project. “I’m not fucking leaving,” a GIF from the film “Wolf of Wall Street” stated, which was posted by O’Neal to Astrals’ discord. It was allegedly his last post.
While Moskowitz praised O’Neal following the settlement proposal, he once told Decrypt that “the largest man is hiding from our lawsuit,” while referring to the FTX case. Struggling to serve the basketball persona, Moskowitz accused O’Neal of creating a cat-and-mouse game.
After making multiple attempts to serve O’Neal, the law firm claimed that he had finally been served outside his house last year, only for his lawyers to counter and claim that documents were instead thrown at his car. A month later, while broadcasting an NBA game, at what once was known as Miami’s FTX Arena, O’Neal was served regarding FTX and his Astrals project.
Before the Astrals settlement was reached, O’Neal tried to get the lawsuit dismissed while employing novel arguments. For example, his lawyers argued that the digital assets in question weren’t meant for investors last year, but that they were rather intended for gamers.
Still, the project’s social media presence has fallen off amid the lawsuit. For example, the last time Astrals posted on Twitter (aka X) was in December 2023.
“Gm Solana,” the project wrote. “We are still alive.”
Edited by Andrew Hayward
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Source: https://decrypt.co/292326/shaq-11-million-settlement-solana-nft-lawsuit
