Soccer superstar Cristiano Ronaldo is in the midst of a legal battle as he faces a proposed class-action lawsuit from plaintiffs who allege they suffered financial losses due to his involvement in promoting the embattled cryptocurrency exchange, Binance.
Ronaldo accused of promoting unregistered securities
In a filing dated November 27, 2023, submitted to a Florida District Court, it is alleged that Cristiano Ronaldo
“promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance.”
The complaint contends that Ronaldo’s endorsement of Binance led users to invest in what they believed were unregistered securities, including Binance’s native cryptocurrency, BNB, and its crypto yield programs.
The lawsuit asserts that Ronaldo’s promotions played a significant role in soliciting investments in these unregistered securities, leveraging his massive following across social media platforms, which amounts to approximately 850 million followers.
According to the complaint, Ronaldo’s promotion of Binance’s non-fungible tokens (NFTs) saw a substantial increase in searches for “Binance” in the week following the initial sale, indicating the influential impact of the soccer star.
Allegations of Ronaldo’s knowledge and disclosure
The plaintiffs argue that Cristiano Ronaldo, given his experience in investments and substantial resources, should have been aware of Binance’s alleged involvement in selling unregistered crypto securities.
The lawsuit cites guidance from the U.S. Securities and Exchange Commission (SEC), which emphasizes the need for celebrities to disclose payments received for promoting cryptocurrencies. It is alleged that Ronaldo failed to make such disclosures, contributing to the controversy surrounding his association with Binance.
The proposed class-action lawsuit is brought forth by three plaintiffs: Michael Sizemore, Mikey Vongdara, and Gordon Lewis. They are seeking both damages for their financial losses and funds to cover legal fees incurred in pursuing this legal action.
The case casts a spotlight on the responsibility and liability of celebrities and influencers in the cryptocurrency space, particularly when endorsing platforms and assets that may be subject to regulatory scrutiny.
Binance’s ongoing legal troubles
While Cristiano Ronaldo’s legal predicament unfolds, Binance and its founder, Changpeng “CZ” Zhao, are facing their own set of legal challenges. Earlier this year, Binance agreed to a substantial $4.3 billion settlement with U.S. authorities in response to money laundering charges and allegations of operating an unregistered money-transmitting business.
As part of the settlement, CZ stepped down as CEO and may potentially face up to 18 months in prison. Additionally, Binance agreed to up to five years of compliance monitoring by the U.S. Justice Department and Treasury.
Furthermore, the SEC has initiated legal action against Binance, alleging various violations, including the sale of unregistered securities. The regulatory agency is also reportedly investigating potential misappropriation of customer funds by the exchange, further complicating the legal landscape for one of the world’s largest cryptocurrency exchanges.