Miami Court Ruling on Shaquille O’Neal and Solana NFT Project

A Miami court determined that U.S. basketball legend Shaquille O’Neal was involved with the Solana NFT project Astrals as a “seller” but not a “control person.” This decision dismissed some allegations against O’Neal in a class action lawsuit regarding unregistered securities that began in May 2023.

Astrals is a Solana-based NFT initiative that showcased 10,000 unique 3D avatars aimed at fostering investment in a metaverse called Astralverse, accompanied by a decentralized autonomous organization (DAO) and its governance cryptocurrency, Galaxy.

The court documents indicated that O’Neal promoted the project through various online platforms, including a video where he suggested that the Astrals team would continue development until the NFTs reached a valued price of 30 SOL. Plaintiffs accused O’Neal of continuing his promotion during the collapse of FTX, ultimately abandoning the project and causing NFT prices to significantly decrease.

The allegations suggested that O’Neal should have recognized potential regulatory issues regarding the sale of unregistered cryptocurrency securities, yet he still promoted the Astrals Project to his vast social media following.

The court dismissed claims that O’Neal was a “control person,” which implied he had “actual power” over Astrals. However, U.S. District Judge Federico Moreno designated O’Neal as a “seller” who effectively solicited purchases of Astrals products, while rejecting the motion to dismiss claims that Astrals NFTs and Galaxy tokens constitute financial securities.

O’Neal’s legal team contends that he is neither a seller nor a controlling individual of Astrals, and argues that the NFTs and tokens do not legally qualify as “securities.” The court has set a deadline of September 12 for O’Neal and the Astral Project to respond to the allegations.

O’Neal has not yet replied to comments from The Block.