O’Neal is accused of breaking securities laws by offering unregistered Astrals tokens for sale in a proposed class action lawsuit that was submitted to a Florida federal court on Tuesday. Daniel Harper, an investor, asserts that the former NBA player “should have known of potential concerns about regulatory issues concerning the sale of unregistered crypto securities” but instead marketed them to expand his crypto business.
In a lawsuit filed against the platform’s inventor Sam Bankman-Fried and celebrities who supported it, O’Neal is one of the numerous famous people named as defendants. A dispute has recently arisen in the case over claims that he has been avoiding being served, with lawyers for the investors claiming they have been trying to give him the papers outside of his home, workplace, and car for months. He has been trying to distance himself from the company by saying in December that he was “just a paid spokesperson.” Invokes against O’Neal has been refuted.
With his son and music manager, Shaquille O’Neal founded the Astrals Project in 2022 with the goal of promoting investment in a virtual environment where users could communicate through avatars that could be sold on the market. Investors could purchase NFTs from the project at an official Astrals token market, as well as mint and collect them. O’Neal built his reputation in the field prior to this project by working on Ethereum projects, such as his own NFT series. O’Neal’s advocacy of the Astrals Project is now being scrutinized in a lawsuit, which includes allegations that he promoted a set of NFTs called the “Shaq Signature Pass” that could only be acquired by taking part in community activities or placing bids on Astral tokens and that he boasted that “there will only ever be 50 of these in existence.”
The Shaq Signature Pass is the first consumable NFT of its kind, and we believe the signing technology will have many uses, according to the advertisement.
On his various social media platforms, O’Neal allegedly frequently advertised Astrals NFTs. In another, he advised investors to “hop on the wave before it’s too late.
The lawsuit also asserts that O’Neal promoted FTX, which he released to enhance his own credibility, using the Astrals Project. A “steep drop” in the floor price of Astrals tokens, according to investors. The Howey Test, a guideline developed in a 1946 Supreme Court case for establishing whether a transaction qualifies as an investment contract, will be used to evaluate whether O’Neal offered unregistered securities. One factor is the financial investment made in a joint venture when returns from the labor of third parties are anticipated. According to the lawsuit, Astrals NFTs satisfy all requirements to be classified as securities.
The crypto industry has criticized the lack of regulatory clarity surrounding the matter, and Harper’s attorney, Adam Moskowitz, has replied. In his complaint, Moskowitz claims that it was done on purpose to make securities legislation all-inclusive and vague rather than specific. He also mentions how securities regulation purposely avoids being clear. In planned class actions brought against the crypto exchange companies, Moskowitz is also defending the interests of FTX and Voyager clients.
