Shaquille ONeal Sued Over Ownership and Promotion of Astrals Crypto – The Hollywood Reporter

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Shaquille O’Neal 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 O’Neal violated securities laws by selling unregistered Astrals tokens. Investor Daniel Harper claims the former NBA star “should have known about potential concerns about regulatory issues surrounding the sale of unregistered crypto securities,” but promoted them anyway to advance his crypto empire.

O’Neal 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 advertisements for FTX and tried to distance himself from the company, 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, O’Neal launched the Astrals project with his music director, Brian Bayati, as CEO and his son, Myles O’Neal, 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, O’Neal built his crypto credibility through his involvement in various Ethereum projects, including his own NFT series.

The costume details O’Neal’s promotion of the Astrals project. In a series of NFTs called “Shaq Signature Pass”, he boasted that “there will only ever be 50” and 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 many applications,” the promotion said.

O’Neal repeatedly promoted the NFT Astrals on his 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 O’Neal used the Astrals Project to promote FTX, which he released to bolster his own credibility.

Investors say there has been a “sharp decline” in the floor price of Astrals tokens.

Whether O’Neal 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 a contract of investment. Factors include investing money in a joint venture where profit is expected from the efforts of others. 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 is intentionally written to be broad and all-encompassing. He adds: “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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