Shaquille O'Neal Agrees to Pay $11 Million to Settle Lawsuit Tied to Troubled Astrals NFT Project

The settlement seeks to repay investors who reportedly bought unregistered securities through Solana-based NFTs and the associated governance token – GLXY.

NBA legend Shaquille O’Neal has agreed to pay $11 million to settle a class-action lawsuit over his involvement in the failed Astrals NFT project, according to court documents filed on Friday.

The settlement seeks to compensate investors who purchased NFTs and the associated governance token, GLXY, which were allegedly unregistered securities. If approved by the court, the agreement will also resolve all legal claims against O’Neal terkait with the NFT project.

As per the cooperation agreement, O’Neal and other parties involved in the Astrals project will collectively pay $11 million to cover damages for affected investors and legal costs. The settlement aims to cater to those who bought the NFTs before the project collapsed in 2022.

The class-action lawsuit, filed on behalf of investors, alleged that O’Neal played an active role in promoting the NFTs and the token on social media and during his DJ sets.

The project, which began with 10,000 metaverse avatars and a token on Solana, garnered significant attention due to O’Neal’s involvement. However, after大力 endorsing the initiative, O’Neal and his team abandoned the project, resulting in substantial losses for numerous investors.

The lawsuit also claimed that O’Neal had defrauded investors by offering securities without registering the NFTs and the GLXY token. A Florida federal judge had previously ruled that O’Neal could be liable as a “seller” of the securities under the law even without making any specific recommendations to the plaintiffs.

This decision came after the judge considered O’Neal’s financial interest in the success of the Astrals project and his active social media influence in marketing the assets.

In late October, the Astrals team informed the community of its critical financial situation and announced the impending bankruptcy. The project stated that it would discontinue the GLXY token as it could no longer sustain its operations.

In this case, with the settlement in place, O’Neal will be able to avoid a lengthy legal battle and come to an agreement with the impacted investors.

O’Neal had previously attempted to have the lawsuit dismissed, arguing that the digital assets were intended for gamers rather than investors.

This development comes amid increasing legal scrutiny of celebrities endorsing cryptocurrencies and digital assets. In 2022, Kim Kardashian agreed to pay the U.S. Securities and Exchange Commission (SEC) $1.3 million for promoting EthereumMax.

Moreover, American football player Tom Brady and Seinfeld co-creator Larry David are also facing lawsuits related to the bankrupt FTX crypto exchange.

It’s also interesting to note that the broader NFT market has been showing signs of recovery of late. According to Cryptopolitan, sales volume increased to $356 million in mid-October, marking an 18% uptick from the previous month.

Furthermore, the number of transactions rose by 42% to reach 7.2 million, and this growth in NFT sales continued into mid-November with a 94% rise in sales.