American former basketball player Shaquille O’Neal recently secured a partial win in his legal case linked to the Astral non-fungible token (NFT) project.
On August 16, the Florida court ruled that O’Neal wasn’t in charge of the project, dismissing claims that he had extensive control. However, the court did identify his role as a “seller,” which connects him directly to promoting the project.
This case is part of a larger lawsuit initiated last year, where investors accused the Astral project of selling unregistered securities and claimed O’Neal was not transparent about his involvement.
The ruling brings mixed results for O’Neal. While the court decided he didn’t have overarching control of the project, it did establish that he played a part in marketing the NFTs to his followers.
This could pose legal issues for O’Neal if the court later classifies Astrals NFTs and Galaxy tokens as securities. Such a decision would open the door for potential legal repercussions for his promotion of the project.
The legal battle isn’t over yet. O’Neal and the Astral project must respond to the remaining claims by September 12, 2024. The final outcome of this case could have broader implications for how celebrities engage with cryptocurrency and NFT endorsements.
This isn’t the first instance where a prominent figure or company has faced accusations of selling NFTs as unregistered securities.
In July, a US judge denied DraftKings’ attempt to dismiss a class action lawsuit, which alleged that their NFTs were unregistered securities. Following this, the company shut down its Reignmakers NFT game and marketplace, citing legal concerns.
In June, Dapper Labs settled a lawsuit related to its NBA Top Shot NFTs for $4 million. The settlement confirmed that these digital collectibles are not considered securities, and Dapper Labs agreed to further decentralize the Flow blockchain, aiming to give users more control.
Last November, soccer star Cristiano Ronaldo was also hit with a class-action lawsuit connected to his NFT partnership with Binance. The lawsuit raised questions about his role in promoting what was alleged to be unregistered securities.
These legal disputes and the ongoing uncertainty surrounding the classification of NFTs have drawn significant attention from artists and the broader community. At the end of last month, artists Brian Frye and Jonathon Mann filed a lawsuit against the SEC, seeking clarification on whether NFTs should be considered securities and if artists need to register their NFTs and disclose potential risks before selling them.
