Shaquille O’Neal Settles NFT Lawsuit With $11 Million Payment

Former NBA legend Shaquille O’Neal has agreed to pay $11 million to resolve a class-action lawsuit tied to his involvement in the Solana-based Astrals NFT project. A Florida federal judge, Federico Moreno, approved the final settlement on April 1, with the order made public on April 8. The settlement establishes an $11 million fund for eligible investors who purchased Astrals NFTs between May 2022 and January 15, 2024, or acquired the project’s GLXY tokens during that period. The court also approved $2.9 million in attorney fees and associated costs, with Judge Moreno ruling the fee request was “fair and reasonable,” and no objections from the plaintiffs.

The lawsuit, initially filed in May 2023, alleged that Shaquille O’Neal had promoted and helped launch the Astrals NFT collection, which plaintiffs argued amounted to the unregistered sale of securities. They claimed to have suffered financial losses due to O’Neal’s promotional efforts. In August, Judge Moreno acknowledged that the plaintiffs had plausibly alleged the former athlete acted as a seller under securities law. O’Neal reached a settlement agreement in November.

Astrals NFTs launched in April 2022 and featured 10,000 unique 3D avatars created by artist Damien Guimoneau. The project pitched itself as an immersive metaverse experience where users could interact with each other and with O’Neal himself. However, the collection has shown no signs of activity in the past two years. The lawsuit accused O’Neal of being the public face of Astrals, urging investors to join the project with phrases like, “Hop on the wave before it’s too late.” Despite the collapse of cryptocurrency exchange FTX in November 2022, O’Neal remained publicly supportive of Astrals. In its ruling, the court dismissed the claim that O’Neal was a “control person” within the project, meaning someone who held actual power or control over its operations.

This settlement marks a significant development in the ongoing legal battles surrounding NFT projects and celebrity endorsements. The case highlights the complexities and risks associated with promoting digital assets, particularly in the volatile and unregulated cryptocurrency market. The approval of the settlement and the associated legal fees underscores the court's recognition of the plaintiffs' claims and the need for accountability in such high-profile cases. The outcome serves as a cautionary tale for celebrities and investors alike, emphasizing the importance of due diligence and compliance with securities regulations when engaging in NFT projects.