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Friday February 23, 2024

Cristiano Ronaldo faces $1 billion class-action lawsuit for promoting Binance

Cristiano Ronaldo knew or should have known “about Binance selling unregistered crypto securities,” alleges the lawsuit

By Web Desk
November 29, 2023
Cristiano Ronaldo rejoined Manchester United in August. — AFP/File
Cristiano Ronaldo rejoined Manchester United in August. — AFP/File 

Plaintiffs alleging losses from Cristiano Ronaldo's endorsement of the now-legally plagued cryptocurrency exchange Binance have filed a proposed class-action lawsuit against the football player.

A November 27 filing to a United States district court in Florida claimed Ronaldo “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance.”

In mid-2022, Binance announced a multiyear agreement with Ronaldo to promote a series of his own nonfungible tokens (NFTs), with at least three of the football player's collections linked to Binance.

“Ronaldo’s promotions solicited or assisted Binance in soliciting investments in unregistered securities by encouraging his millions of followers, fans, and supporters to invest with the Binance platform.”

According to the lawsuit, Ronaldo was a crucial element of Binance's rising popularity because of his influence and reach, with 850 million followers across social media. 

They claim his NFT sales were "incredibly successful" in advertising the exchange, with a 500% spike in searches for Binance in the week after the initial sale.

The suit alleges Ronaldo knew or should have known “about Binance selling unregistered crypto securities,” as he has “investment experience and vast resources to obtain outside advisers.”

The lawsuit referenced Securities and Exchange Commission (SEC) instructions instructing celebrities to declare compensation received for promoting cryptocurrency, which the complaint says Ronaldo did not do.

Plaintiffs in the class-action complaint include Michael Sizemore, Mikey Vongdara, and Gordon Lewis, who want monetary damages and funding to cover legal bills.

Meanwhile, Binance and its creator Changpeng "CZ" Zhao are embroiled in their own legal issues, having pleaded guilty and paid a $4.3 billion settlement to the US authorities for anti-money laundering crimes and operating an unlicensed money-transmitting firm.

Zhao resigned as CEO and now faces up to 18 months in jail. Binance has consented to a five-year compliance monitoring period by the US Departments of Justice and Treasury.

The SEC has also filed a lawsuit against Binance, alleging, among other things, that it marketed unregistered securities and is also examining whether Binance stole client cash.