Famous football player Cristiano Ronaldo is facing a proposed class-action lawsuit, with plaintiffs alleging they incurred losses due to his endorsement of the cryptocurrency exchange Binance, which is currently embroiled in legal issues.
A legal document submitted on Nov. 27 to a district court in Florida, USA, accuses Ronaldo of being involved in the promotion and sale of what are claimed to be unregistered securities, in collaboration with Binance.
In mid-2022, Ronaldo and Binance formed a multiyear agreement to launch a series of his nonfungible tokens (NFTs), with at least three collections associated with Binance.
The lawsuit contends that those who purchased Ronaldo’s NFTs were more inclined to use Binance for additional investments, including what the plaintiffs argue are unregistered securities, such as Binance’s BNB cryptocurrency and its crypto yield programs. The complaint highlights Ronaldo’s significant influence, noting his 850 million social media followers, and alleges that his NFT sales markedly boosted Binance’s profile, citing a 500% increase in searches for Binance following the initial NFT sale.
The suit further alleges that Ronaldo, given his investment experience and access to expert advisors, either knew or should have known about Binance’s activities related to selling what they claim are unregistered crypto securities. It also references guidance from the U.S. Securities and Exchange Commission (SEC) on the necessity for celebrities to disclose payments for promoting cryptocurrencies, which the plaintiffs assert Ronaldo failed to do.
Plaintiffs Michael Sizemore, Mikey Vongdara, and Gordon Lewis are seeking damages and compensation for legal expenses in this lawsuit.
Concurrently, Binance and its founder Changpeng “CZ” Zhao are dealing with their own legal challenges. They have admitted guilt and agreed to a $4.3 billion settlement with the U.S. government for Anti-Money Laundering law violations and operating an unregistered money-transmitting business.
Zhao has resigned as CEO and could face up to 18 months in prison. Binance has consented to up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury.
Additionally, the SEC has filed a lawsuit against Binance, alleging, among other things, the sale of unregistered securities. The SEC is also reportedly investigating whether Binance misused customer funds.
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