decrypt.co
An amended complaint was filed on Thursday in the federal class action lawsuit against Shaquille O’Neal over his NFT project Astrals, and the basketball icon faces allegations of violating securities laws in connection to offering Solana-based assets and an associated token.
The 111-page filing comes after a district judge in Florida appointed the case’s lead plaintiffs last month, who are represented by counsel at The Moskowitz Law Firm. Managing Partner Adam Moskowitz told Decrypt the filing represents a pivotal step forward.
“People applied and Judge [Federico] Moreno selected our clients to be the lead plaintiff,” he said. “That's a big, big development, because now it means that they basically run the show for all of the investors, and they've selected us to be class counsel.”
Moskowitz’s firm is helping lead the charge on several other crypto-related class action lawsuits, including cases that involve collapsed firms Voyager and FTX. When O’Neal was served a complaint for the Astrals-focussed lawsuit at an NBA game in May, the phenom was also served a complaint that stems from a commercial he did for FTX following several previous attempts.
Thursday’s amended complaint—which is twice as long as the case’s initial one—offers a more robust look at O’Neal’s involvement in Astrals, Moskowitz claimed, including now-deleted videos and tweets gathered through websites like archive.org. O’Neal was in contact with Astral team members weekly if not daily, Moskowitz claimed.
“What we've put in this amended complaint is a much more extensive proof about how personally involved Shaquille O’Neal, his business partner, and his son were in Astrals,” he said. “It’s much more than we ever expected.”
Representatives for O’Neal did not immediately respond to a request for comment from Decrypt.
The amended complaint alleges that Shaq was intimately tied to Astrals and that the project's value was "linked almost entirely to O'Neal's celebrity status." But not long after cryptocurrency exchange FTX—which O'Neal had endorsed—collapsed last November, the hoops legend allegedly disappeared from the Astrals community.
However, the suit alleges that he posted a GIF from the film "The Wolf of Wall Street" with the phrase "I'm not fucking leaving" as his final post in the Astrals Discord community.
"But O'Neal has not been seen at Astrals since this now-legendary 'Wolf of Wall Street' post," the complaint alleges.
Astrals, a Solana-based NFT project, consisted of 10,000 “metaverse-ready” avatars tied to a DAO and a “story-driven, play-to-earn role-playing game,” according to part of the project’s white paper quoted in the complaint. The lawsuit also takes issue with the DAO’s governance token, $GLXY, claiming that it’s an unregistered security too.
Two large venture capital firms that struck partnerships with Astrals and allegedly traded $GLXY, Cypher Capital and MH Ventures, are mentioned in the complaint. While they are not listed as defendants, Moskowitz noted, he said they will be served as the lawsuit progresses.
“We're not naming them yet, but when we have an opportunity, we're certainly going to serve third-party subpoenas to Cypher Capital in Dubai and MH Ventures in London,” he said.
Cypher Capital and MH Ventures did not immediately respond to requests for comment from Decrypt.
In July, O’Neil’s lawyers asked for the class-action lawsuit to be dismissed, explaining that the digital assets in question were meant for gamers and not investors, per Law 360.
According to a court filing in late August, O’Neal’s motion was ultimately denied. The district judge overseeing the case set a September 29 deadline for the basketball star to respond to Thursday’s amended complaint.