NBA Hall of Shaquille O’Neal, a basketball legend and sports broadcaster, has struck a $11 million deal to dismiss a class-action lawsuit stemming from his promotion of the Astrals non-fungible token (NFT) collection. The deal, which is pending court approval, follows months of legal battle over charges that O’Neal pushed unregistered securities.
The Astral NFT ControversyThe case stemmed from O’Neal’s involvement in the Astrals NFT project, which included 10,000 digital avatars intended for a metaverse experience. Many investors apparently bought these tokens because of O’Neal’s support. However, as the market for NFTs fell, the assets lost value, causing buyers to suffer financial losses.
Investors accused O’Neal of using his celebrity position to entice customers, only to abandon the project when the market collapsed. In September 2023, they filed a class-action complaint in a Florida court, claiming that the Astrals NFTs operated as unregistered securities.
Settlement Details:After a judge found the plaintiffs’ claims plausible, O’Neal agreed to settle for $11 million. We expect the monies to cover legal bills and compensate impacted investors. While the settlement does not constitute an admission of guilt, it highlights the legal concerns that celebrities face when supporting digital properties.
The broader impact of NFTsThis lawsuit comes amid a rise in the NFT business. Monthly sales volumes rose in October, reaching $356 million, up 18% from the previous month. Weekly NFT sales also increased 94%, indicating increasing interest in the space.
O’Neal is not alone in facing legal issues while promoting cryptocurrency and NFT ventures. Other celebrities, like Kim Kardashian and Tom Brady, have faced litigation or sanctions for their roles in digital asset advertising. These examples serve as cautionary tales about the duties and risks associated with celebrity endorsements in tumultuous markets.
Investors seeking responsibility in the rapidly evolving cryptocurrency market view the settlement as a significant step. However, it raises concerns about the future of NFT rules and the role of influencers in pushing such initiatives.
