Shaquille O’Neal has agreed to pay $11 million in a proposed settlement to resolve claims tied to his troubled Astrals NFT project. The settlement seeks to repay investors who reportedly bought unregistered securities through Solana-based NFTs and the associated governance token – GLXY.
If the court accepts it, the agreement will also bring closure to all the legal issues that O’Neal has regarding the NFT project. According to the terms of the cooperation, O’Neal and other parties related to the Astrals project will have to pay $11 million in total. This amount will cater for damages of the affected investors as well as the legal costs. The settlement is meant to compensate clients who bought the NFTs prior to the failure of the project in 2022.
The class-action lawsuit, filed on behalf of the investors, accused O’Neal of actively participating in the promotion of the NFTs and the token on social media and during his DJ sets. The project that kicked off with 10,000 metaverse avatars and a token on Solana has been in the spotlight because of O’Neal’s participation. However, after high-profile endorsements, O’Neal and his team dropped the project, which led to huge losses for many investors.
Court ruling establishes O’Neal’s liability in NFT case
The lawsuit claimed that O’Neal had defrauded investors by offering securities without registration through the NFTs and the GLXY token. A Florida federal judge had earlier held that O’Neal could be held liable as a “seller” of the securities under the law without having to make any specific recommendations to the plaintiffs. This came after the judge looked at O’Neal’s financial interest in the success of the Astrals project and his active social media influence in marketing the assets.
At the end of October, the Astrals team shared with the community about the critical financial issues and claimed that bankruptcy was imminent. The project stated that it would cease the GLXY token as it was no longer capable of supporting its operations.
In this case, with the settlement in place, O’Neal will be able to avoid a long drawn-out legal process and be able to come to an agreement with the investors that were affected. O’Neal had earlier sought to get the lawsuit thrown out, stating that the digital assets were meant for gamers, not investors.
This comes as more and more celebrities are being brought to justice for endorsing cryptocurrencies and digital assets. In 2022, Kim Kardashian agreed to pay the U.S. Securities and Exchange Commission (SEC) $1.3 million after promoting EthereumMax. Other celebrities such as the American football player Tom Brady and the co-creator of Seinfeld Larry David are also being sued related to the FTX crypto exchange that went bankrupt.
It is worth noting that the overall NFT market has been on the rise recently. The sales volumes rose in October 2024 to $356 million, an 18% improvement from the previous month. Also, the number of transactions increased by 42% and reached 7.2 million. This growth in NFT sales persisted into mid-November, with a 94% rise in sales, as reported by Cryptopolitan.
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Source: https://www.cryptopolitan.com/shaquille-oneal-settles-astrals-nft-lawsuit/