Shaquille O’Neal has been sued again for his cryptocurrency promotion, this time in relation to his Astrals project.
A class action lawsuit filed Tuesday in Florida federal court alleges that O’Neal violated securities laws by selling unregistered Astrals tokens. Investor Daniel Harper claims that the former NBA star “should have known about potential concerns about regulatory issues surrounding the sale of unregistered cryptocurrency securities” but still promoted them to further his crypto empire.
O’Neal is one of them several prominent defendants named in a lawsuit against founder Sam Bankman-Fried and stars who have endorsed the platform. He appeared in ads for FTX and tried to distance himself from the company, saying in December he was “just a paid spokesperson.” There was an argument recently emerged in this case claims he evaded service, and lawyers for the investors said they tried for months to get him the papers outside of his home, workplace and car. O’Neal has denied the allegations.
In 2022, O’Neal launched the Astrals Project with his music executive Brian Bayati as CEO and his son Myles O’Neal as head of investor relations. The goal is to encourage investment in a virtual world where users could connect with others through unique avatars that could be traded through a marketplace, the complaint said. Besides minting and collecting NFTs, investors can also purchase them on an official Astrals token marketplace. Prior to founding the company, O’Neal built his credibility in the crypto space through his involvement in various Ethereum projects, including his own NFT series.
The suit describes O’Neal’s promotion for the Astrals project. In a series of NFTs called “Shaq Signature Pass,” he announced that “there will only ever be 50 of these” and that these could only be earned by participating in the community or bidding on Astral tokens.
“The Shaq Signature Pass is the first consumable NFT of its kind, and we believe the signature technology will have far-reaching applications,” the campaign reads.
According to the complaint, O’Neal repeatedly promoted Astral’s NFTs on his various social media accounts. In one, he urged investors to “catch the wave before it’s too late.”
The lawsuit also alleges that O’Neal used the Astrals project to promote FTX, which he issued to bolster his own credibility.
Investors claim that the floor price of Astrals tokens has “dropped precipitously”.
The question of whether O’Neal sold unregistered securities is accounted for using the Howey test, a standard developed in a 1946 Supreme Court case to determine whether a transaction qualifies as an investment treaty. Factors include investing money in a joint venture where profits are expected to come from the efforts of others. The lawsuit alleges that Astral’s NFTs meet all the criteria to qualify as collateral.
Adam Moskowitz, an attorney for Harper, responding to criticism within the crypto industry of a lack of regulatory clarity on the issue, arguing in the complaint, “Securities regulation is not intended to be precise but is intentionally worded to be comprehensive and all-encompassing.” . comprehensive.” He adds, “Clarity isn’t just unusual; it is deliberately avoided.”
Moskowitz is also representing FTX and Voyager clients in proposed class action lawsuits against the crypto exchange firms.