⚡ Shaquille O'Neal Agrees to $11M Settlement Over Crypto Promotion
posted 19 Nov 2024
Basketball legend Shaquille O'Neal has agreed to pay $11 million to settle a lawsuit related to promoting his Astrals NFT collection and its native cryptocurrency, Galaxy.
To promote the project, O'Neal employed creative marketing tactics, including performing as DJ Diesel at events with massive displays of Astrals characters in the background.
A class-action lawsuit claimed that the Astrals NFT collection and Galaxy tokens were unregistered securities, sparking a legal battle that lasted over a year.
In August 2023, a federal judge overseeing the case allowed it to proceed, ruling that the plaintiffs had presented credible allegations of securities violations.
By November 2024, both parties had reached a settlement, pending court approval.
In a private Discord channel, Astrals admitted that rising legal expenses placed significant financial pressure on the project.
O'Neal’s case is part of the larger debate on whether NFTs qualify as securities. Recent SEC actions against NFT projects like Impact Theory, Stoner Cats, and Flyfish Club have heightened concerns among digital artists and NFT platforms. The SEC has also issued a Wells Notice to OpenSea, the leading NFT marketplace, signaling potential legal action.
Kim Kardashian resolved her case with the SEC by agreeing to pay $1.26 million for promoting the cryptocurrency EthereumMax. The reality star had received $250,000 for the endorsement but failed to disclose the payment, violating SEC rules that require transparency regarding compensation for promoting specific crypto assets. This lack of disclosure led to charges of unlawful advertising of digital assets.
Other celebrities, including Madonna, Gwyneth Paltrow, David Ortiz, Tom Brady, and Gisele Bündchen, have also been sued by investors. These lawsuits claim the stars failed to reveal their financial incentives for endorsing cryptocurrency companies. This highlights the increasing scrutiny on celebrity involvement in crypto promotions.
The $11 million settlement, filed in Florida’s federal district court in May 2023, includes attorney fees and compensation for buyers of NFTs and tokens. The agreement resolves a class-action lawsuit that accused O'Neal of promoting unregistered securities.
Basketball Legend Shaquille O'Neal. Source: kmuw.org
O'Neal and his son founded the startup Astrals in 2022, launching an NFT collection featuring 10,000 3D metaverse-ready avatars.
To promote the project, O'Neal employed creative marketing tactics, including performing as DJ Diesel at events with massive displays of Astrals characters in the background.
A class-action lawsuit claimed that the Astrals NFT collection and Galaxy tokens were unregistered securities, sparking a legal battle that lasted over a year.
In August 2023, a federal judge overseeing the case allowed it to proceed, ruling that the plaintiffs had presented credible allegations of securities violations.
By November 2024, both parties had reached a settlement, pending court approval.
In a private Discord channel, Astrals admitted that rising legal expenses placed significant financial pressure on the project.
O'Neal’s NFT Collection. Source: decrypt.co
Shaquille O'Neal is also named in a separate lawsuit involving a group of celebrities accused of promoting the now-bankrupt cryptocurrency exchange FTX.
O'Neal’s case is part of the larger debate on whether NFTs qualify as securities. Recent SEC actions against NFT projects like Impact Theory, Stoner Cats, and Flyfish Club have heightened concerns among digital artists and NFT platforms. The SEC has also issued a Wells Notice to OpenSea, the leading NFT marketplace, signaling potential legal action.
Kim Kardashian resolved her case with the SEC by agreeing to pay $1.26 million for promoting the cryptocurrency EthereumMax. The reality star had received $250,000 for the endorsement but failed to disclose the payment, violating SEC rules that require transparency regarding compensation for promoting specific crypto assets. This lack of disclosure led to charges of unlawful advertising of digital assets.
Other celebrities, including Madonna, Gwyneth Paltrow, David Ortiz, Tom Brady, and Gisele Bündchen, have also been sued by investors. These lawsuits claim the stars failed to reveal their financial incentives for endorsing cryptocurrency companies. This highlights the increasing scrutiny on celebrity involvement in crypto promotions.
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