A US Court Partially Grants Class-Action Lawsuit Against Shaquille O’Neal Over Astrals NFT Project
A US court has partially granted a class-action lawsuit against former NBA star Shaquille O’Neal, alleging his involvement in the Astrals NFT project. O’Neal is accused in the lawsuit of marketing the project and urging investors to join, but later withdrew funding. Astrals’ financial products suffered a significant loss as a collection of 10,000 unique, 3D avatar NFTs was sold during the trial.
The project was developed in partnership with Xintelec, an independent non-profit organization (DAO) that specializes in incubating innovative projects. Galaxy token was designed to be instrumental in managing the DAO’s decision-making process for the first. Despite this, the project’s prospects changed dramatically when cryptocurrency exchange FTX went bankrupt in November 2022. Shortly after the collapse of FEA (the U.K. crypto-currency exchange) which had been running as an advertising company for several years, O’Neal, who was said to be actively promoting Astrals, sent a message saying “I’m not F***ing Leaving” – despite initially having promised his support — he later dropped out back, leaving investors.
The value of Astrals’ financial products, including the Galaxy token, plummeted as a result, causing significant losses for investors. The lawsuit, filed in the US District Court for the Southern District of Florida, Miami Division, alleges that O’Neal and the Astra project have breached securities laws and engaged in fraudulent activities. The court documents filed on Friday indicated that the case will proceed, with partial approval from District Judge Moreno.
The lawsuit asserts that O’Neal had a more extensive involvement in the project than initially thought, and that it was his sole focus on promoting Astrals to potential investors. According to the plaintiffs, O’Neal’s backing of this project gave it a certain level of credibility, which resulted in investors purchasing various Astrals financial products, including the Galaxy token.
The court has mandated that firm and its associated company must respond to these claims by 12 September 2024. As the case moves forward, the cryptocurrency community will be closely monitoring the impact of this ongoing legal battle on the wider NFT and DAO ecosystem.
This new development serves as a timely reminder to exercise due diligence and avoid certain actions before investing in either cryptocurrency or NFP. Despite the fact that celebrity endorsements can generate buzz and excitement, they do not necessarily suggest the project is legitimate or even likely to be successful. The Astrals saga also highlights the risks of investing in decentralized projects, where the absence of central authority can make it challenging to hold individuals accountable for their actions.
For more insights on the risks and opportunities associated with NFT and DAO ecosystems, check out our article on “NFT Market Trends and Risks: What You Need to Know”.
In light of the ongoing cryptocurrency market developments, investors must remain vigilant and cautious, carefully evaluating the risks and opportunities associated with each project. The court documents also mention that Block.one, a company involved in the EOS blockchain project, is believed to own digital assets, including Bitcoin, as per the disclosure section. It is currently unclear how this connection will impact the case or the wider cryptocurrency market.
As the legal process unfolds, the cryptocurrency community will be closely monitoring the outcome of the charges against O’Neal and the Astral project. One thing is certain: this case has significant implications for the NFT and DAO ecosystem, and its outcome will have far-reaching effects on investors, project developers, as well as celebrities.
