The court did not dismiss the allegation that Astrals sold tokens which were unregistered “securities.”
A U.S. court has granted one part and dismissed another part of a class action lawsuit against legendary basketball player Shaquille O’Neal for his role in the NFT project Astrals, according to court documents filed on Friday.
Astrals was a project involving a collection of 10,000 non-fungible tokens (NFTs) 3D avatars and a decentralized autonomous organization (DAO) for “incubating innovative projects.” Astral NFTs could be used as virtual avatars and the Galaxy token was the governance token of the DAO.
The case alleged that O’Neal acted as the face of Astrals urging investors to “[h]op on the wave before its too late.” Even when cryptocurrency exchange FTX collapsed in November 2022, O’Neal sent out a graphics interchange format (GIF) on the community message board Discord, from The Wolf of Wall Street that read, “I’m not F***ing Leaving,” the court document said. The lawsuit alleged that O’Neal fled the project after that and “the value of Astrals financial products plummeted.”
The U.S. District Court for the Southern District of Florida, Miami Division, dismissed the allegation that O’Neal was a “control person,” meaning someone who exercised actual power or control.
However, the court found that O’Neal’s involvement in the project falls under the definition of a “seller” because he successfully solicited the purchase of the products, despite O’Neals argument that he was not an officer or director of the company.
The court did not dismiss the allegation that Astrals sold tokens which were unregistered “securities.”
The attorney for the investors in the lawsuit, Adam Moskowitz, who also represents investors in the FTX, Voyager and Binance lawsuits, suggested that this ruling could bring clarity in other pending crypto class action litigations.
“We are extremely fortunate that District Judge Moreno authored the first extensive ruling on cryptocurrency and celebrity promotions … bringing clarity and understanding in all of the other crypto class actions litigation, many are pending in this District.
O’Neal and the Astral project are supposed to reply to the allegations by September 12, 2024.
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Source: Vietnam Insider