A U.S. federal court has partially dismissed a class-action lawsuit against former basketball star Shaquille O’Neal related to his involvement in the NFT project Astrals.
The decision, issued by the U.S. District Court for the Southern District of Florida, comes as O’Neal faces allegations regarding his role in promoting the project, which featured 10,000 3D NFT avatars and a decentralized autonomous organization (DAO) aimed at fostering innovative projects.
The lawsuit accused O’Neal of being the public face of Astrals, urging investors to join the project with phrases like, “Hop on the wave before it’s too late.”
O’Neal Continued to Support Astrals After FTX Collapse
Despite the collapse of cryptocurrency exchange FTX in November 2022, O’Neal remained publicly supportive of Astrals, even posting a GIF from The Wolf of Wall Street on the project’s Discord channel, suggesting he was not leaving the project.
However, the lawsuit alleges that O’Neal later distanced himself from Astrals, leading to a significant drop in the value of its financial products.
In its ruling, the court dismissed the claim that O’Neal was a “control person” within the project, meaning someone who held actual power or control over its operations.
However, the court upheld the allegation that O’Neal could be considered a “seller” under legal definitions, as he successfully solicited the purchase of Astrals products, even though he was not an officer or director of the company.
Additionally, the court did not dismiss the accusation that Astrals sold unregistered securities, an issue central to the ongoing legal scrutiny of cryptocurrency and NFT ventures.
Adam Moskowitz, the attorney representing the investors in this case, hailed the ruling as potentially impactful for other similar lawsuits.
He noted that the decision by District Judge Moreno provides much-needed clarity in the complex area of cryptocurrency and celebrity endorsements, which could influence the outcomes of other pending cases.
O’Neal and the Astrals project team are expected to respond to the remaining allegations by September 12, 2024.
Companies Drop NFT Features
It is worth noting that there has been a trend of companies discontinuing their involvement in the NFT space.
Back in March, Starbucks, the renowned multinational coffee chain, made the decision to terminate its NFT rewards program .
In January, gaming retailer GameStop announced the closure of its NFT marketplace after scaling back its crypto services over the past two years.
More recently, X, under the ownership of Elon Musk, discontinued a feature that allowed premium users to use NFT images as their profile pictures.
Despite the declining interest in the NFT space, there has also been some positive news.
Last month, renowned Portuguese footballer Cristiano Ronaldo revealed his collaboration with Binance for the launch of his fourth NFT collection.
The collection, which was unveiled on May 29 on the Binance NFT Marketplace, pays homage to Ronaldo’s illustrious career, showcasing highlights from his football journey.
However, it’s worth noting that the football star has been embroiled in legal issues related to his involvement in NFT collection sales with Binance.
In November 2023, Ronaldo faced a class-action lawsuit in a United States district court in Florida.