Superstar soccer player Cristiano Ronaldo has been hit with a class-action lawsuit from plaintiffs who claim they suffered financial losses from his promotion of Binance.
According to the lawsuit filed on November 27 in a Florida District Court, the Portuguese international is accused of promoting, “assisting in”, and actively participating in the “offer and sale of unregistered securities” on the now-legally embroiled crypto exchange.
Cristiano Ronaldo Accused of Promoting Sale of Unregistered Securities Through Binance
Binance entered into a partnership with Ronaldo ahead of the 2022 FIFA World Cup in Qatar. As per the multi-year agreement, the former Manchester United, Real Madrid, and Juventus striker promoted a series of his own non-fungible tokens (NFTs) on the platform.
The plaintiffs Michael Sizemore, Mikey Vongdara, and Gordon Lewis allege that Ronaldo’s involvement with Binance led to many of his fans signing up to the exchange and using it to invest in what they claim as “unregistered securities”. They gave an example of the crypto exchange’s BNB token and its crypto yield programs.
The complaint says that with 850 million followers across all social media platforms, Ronaldo’s influence and massive global reach were key to growing the popularity of Binance. They allege that the sale of the 5-time Ballon d’Or winner’s NFT collection substantially boosted the popularity of the exchange, leading to a 500% increase in web searches for Binance in the week following his promotion.
Lawyers argue that Ronaldo should have known about Binace’s involvement in the sale of unregistered crypto securities as he has investment experience and “vast resources to obtain outside advisors”. They said he had no basis to promote a financial product given the legal issues faced by the embattled crypto exchange.
The suit also cited the US Securities and Exchange Commission’s guidance mandating celebrities to disclose any compensation or payments received for promoting cryptocurrencies, which the complaint claims Ronaldo didn’t do.
The plaintiffs are seeking damages and funds to cover legal fees of the lawsuit from the 7-time European champion for club and country.
Binance CEO Steps Down As Part of $4.3 Billion Legal Settlement With the US Government
Meanwhile, Binance and its founder, Changpeng ‘CZ’ Zhao, are facing their own legal battles. Last week, the world’s largest crypto exchange by trading volume and its former CEO pleaded guilty to violations of anti-money laundering laws and operating an unregistered money-transmitting business and agreed to pay a whopping $4.3 billion in fines to the US government to settle the charges.
Zhao was forced to step down from his role as chief executive of the company and faces anywhere between 18 months to 10 years in prison. Meanwhile, Binance has agreed to five years of compliance monitoring by the US Department of Justice (DoJ) and the Department of Treasury.
In June, the SEC filed 13 charges against the crypto exchange, which also include the sale of unregistered securities in the form of cryptocurrencies. Various reports indicate that the financial regulator is also investigating if Binance misappropriated customers’ funds.
Changpeng Zhao, who is a citizen of the United Arab Emirates, has been given permission by the magistrate to remain in the country until his sentencing, which is scheduled for February 23, 2024.