Don’t Trust the Names: The Hidden Risks Behind Famous NFT and Crypto Projects

The Web3 industry, despite its innovative potential, is not always a safe space. Even if your idols or global celebrities promote a project, it doesn’t guarantee risk protection. Coinmooner decided to address this important topic as a reminder: behind flashy promises and big names, significant threats cannot be ignored.

One of the most talked-about stories in recent months involved basketball legend and sports commentator Shaquille O’Neal. He reached a settlement with investors of his Astral NFT project and Galaxy tokens, agreeing to pay $11 million. This amount will cover plaintiffs’ legal fees and compensate digital asset holders. This case highlighted that even projects associated with famous personalities can carry significant financial risks.

The Astral NFT project launched in 2022 and included 10,000 non-fungible tokens created by digital artist Damien Guimoneau. Shaquille O’Neal’s active support and promotion attracted many investors. However, in 2023, the value of these tokens dropped sharply, leading to significant losses for asset holders and subsequent legal proceedings.

Shaq’s NFT Trouble: Why Celebrity Backing Doesn’t Guarantee Web3 Success

In September 2023, a group of investors filed a class-action lawsuit against O’Neal, accusing him of promoting unregistered securities through social media. The lawsuit also alleged that after the NFT sales concluded, the former NBA star distanced himself from the project, negatively impacting asset value. This incident clearly shows how a lack of transparency and accountability can undermine investor trust.

Interestingly, the settlement between Astral NFT investors and O’Neal came amidst rising activity in the NFT market. In just one week, NFT sales volume surged by 94%, reaching $181 million. Most transactions occurred on the Bitcoin, Ethereum, and Solana blockchains, indicating renewed interest in digital assets despite past controversies.

Coinmooner reminds you that precautions are essential in the Web3 industry. Use the most up-to-date security tools to minimize the risk of losing funds and keep your data safe. Attention and caution are the key allies of anyone entering the world of digital assets.

With the recent rise of Bitcoin, scammers have also become more active, looking for ways to exploit users’ inexperience or carelessness.

Stay alert: verify the legitimacy of any offers and avoid suspicious links and apps that could be traps. Remember, when investing in digital assets, you are responsible for your security. Take the extra step to double-check wallets, services, and transactions. Protecting your funds and data is the foundation of successful and safe participation in the cryptocurrency ecosystem.