NBA legend resolves lawsuit tied to Astrals NFTs and GLXY tokens
Astrals investors to receive compensation from $11M fund
Shaquille O'Neal, the legendary basketball star, has reached an $11 million settlement to resolve allegations of promoting unregistered securities through his involvement with Astrals NFT and GLXY tokens. The settlement, awaiting court approval, represents the resolution of a class-action lawsuit in a Florida federal court.
In the lawsuits, O'Neal was accused of leveraging his celebrity status to promote the Astrals project, a collection of 10,000 3D avatars designed for the metaverse, reports Law.com.
Plaintiffs alleged that the financial products related to the project were sold as investments, and their value significantly depended on O'Neal's endorsement. In the class-action lawsuit filed in September 2023, it was claimed that many investors suffered financial losses after the project's collapse.
Compensation fund for affected investors
According to court documents, the $11 million settlement will establish a fund for investors affected by the Astrals Project and GLXY tokens. Investors who purchased these digital assets between May 24, 2022, and the date of preliminary approval will be eligible for compensation. Group attorneys have agreed not to demand fees exceeding $2.91 million.
Adam Moskowitz, the lead counsel for the plaintiffs, praised O'Neal for stepping up to help investors. “Shaq deserves significant credit for his willingness to help all other victims,” said Moskowitz.
The Astrals Project
The Astrals Project initially promised a vibrant metaverse where users could socialize, play, and interact with others, including O'Neal himself. However, plaintiffs claimed that the financial appeal of the project centered on O'Neal's fame rather than the actual utility of its products. In court documents, they cited an instance where O'Neal posted a meme on the project's server, pledging not to leave, only to allegedly withdraw his involvement later.
Court decision
The defendants, including O'Neal and Astrals LLC, argued that the project was not an investment scheme but rather focused on selling collectible digital avatars for gaming purposes. However, U.S. District Judge Federico Moreno ruled that the plaintiffs provided sufficient evidence to classify the NFTs as unregistered securities subject to federal regulations.
As a reminder, recent reports indicate that the popularity of NFTs has been skyrocketing. Over the past seven days alone, NFT sales have surged by 94% to $178.8 million.
