Shaquille ONeal Sued Over Ownership and Promotion of Astrals Crypto

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Shaquille ONeal has again been sued for his cryptocurrency promotions, this time as part of his Astrals project.

A proposed class action lawsuit filed in federal court in Florida on Tuesday alleges that ONeal violated securities laws by selling unregistered Astrals tokens. Investor Daniel Harper claims the former NBA star should have been aware of potential concerns over regulatory issues surrounding the sale of unregistered crypto securities, but promoted them anyway to advance his crypto empire.

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ONeal is one of several famous 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 by saying in December that he was just a paid spokesperson. A dispute recently emerged in the case over allegations that he avoided being served, with the investors’ lawyers saying they were trying to give him the papers outside his home, place of work. work and his car for months. O’Neal denied the charges.

In 2022, ONeal launched The Astrals Project with its Music Director, Brian Bayati, as CEO and his son, Myles ONeal, as Head of Investor Relations. It was intended to promote investment in a virtual world in which users could socialize with others through unique avatars that could be traded through a marketplace, according to the complaint. In addition to minting and collecting NFTs, investors could also purchase them from an official marketplace for Astrals tokens. Prior to founding the company, ONeal built its crypto credibility through its involvement in various Ethereum projects, including its own NFT series.

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The costume details the Astrals Project ONeals promotion. In a series of NFTs called Shaq Signature Pass, he boasted that there would only ever be 50 and they 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 the signature technology is one that we believe will have far-reaching applications, according to the promotion.

ONeal repeatedly promoted NFT Astrals on its various social media accounts, according to the complaint. In one, he urged investors to jump on the wave before it’s too late.

The lawsuit also claims that ONeal used Project Astrals to promote FTX, which it released to bolster its own credibility.

Investors claim that there has been a sharp drop in the floor price of Astrals tokens.

Whether ONeal sold unregistered securities will be tested through the Howey test, a standard that emerged in a 1946 Supreme Court case for determining whether a transaction qualifies as an investment contract. Factors include investing money in a joint venture where benefits are expected from third-party efforts. The lawsuit alleges that Astrals’ NFTs meet all the criteria to be considered a title.

Responding to criticism within the crypto industry of a lack of regulatory clarity surrounding the issue, Adam Moskowitz, a lawyer for Harper, argues in the complaint that securities regulations are not meant to be precise, but rather, it is intentionally written to be broad and comprehensive. . He adds that clarity is not only rare; it is deliberately avoided.

Moskowitz is also representing FTX and Voyager clients in proposed class actions against crypto exchange companies.

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