Image Source: PixabaySoccer superstar Cristiano Ronaldo is facing a proposed class-action lawsuit for promoting crypto exchange Binance.
The lawsuit, filed on November 27 in a United States district court in Florida, asserts that Ronaldo played a role in the sale of unregistered securities in conjunction with Binance.
In mid-2022, Binance entered into a multiyear partnership with Ronaldo to promote a series of his own nonfungible tokens (NFTs), with several of the soccer star’s collections tied to Binance.
The complaint argues that users who purchased Ronaldo’s NFTs were more likely to engage with Binance for other purposes, such as investing in what the plaintiffs claim are unregistered securities, including Binance’s BNB token and its crypto yield programs.
According to the lawsuit, Ronaldo’s endorsement of Binance and his massive following of 850 million social media users significantly contributed to the exchange’s popularity.
“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.”
The plaintiffs contend that Ronaldo’s NFT sales were exceptionally successful in promoting Binance, resulting in a 500% increase in searches for the exchange during the week following the initial sale.
The lawsuit asserts that Ronaldo should have been aware of Binance’s sale of unregistered crypto securities, given his investment experience and substantial resources that could have been used to seek external advice.
It also references guidance from the U.S. Securities and Exchange Commission (SEC), which warns celebrities about the necessity of disclosing payments received for promoting cryptocurrencies—a requirement that the complaint claims Ronaldo failed to fulfill.
The proposed class-action lawsuit has been brought by Michael Sizemore, Mikey Vongdara, and Gordon Lewis, who are seeking damages and funds to cover legal expenses.
Binance Faces Legal Action Despite DOJ Settlement
Binance and its founder Changpeng “CZ” Zhao are facing legal challenges despite a settlement with DOJ.
They recently pleaded guilty and agreed to pay a $4.3 billion settlement to the U.S. government for violating Anti-Money Laundering laws and operating an unregistered money-transmitting business.
Zhao has stepped down as CEO and may face up to 18 months in prison.
Binance has also committed to up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury.
However, as reported, the Securities and Exchange Commission (SEC) is still probing the exchange.
The agency is seeking evidence regarding Binance.US’s alleged backdoor control over customer assets, resembling a structure akin to FTX.
In June, the SEC initiated legal action against Binance and its American counterpart, Binance.US, asserting their involvement in the sale of unregistered securities.
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