Cristiano Ronaldo, the renowned soccer star, is facing legal action over his involvement in promoting the cryptocurrency exchange Binance. A class-action lawsuit has been filed against him, alleging that his promotion led to losses for those who invested in Binance's offerings.
The Allegations Against Ronaldo
Filed on November 27 in a United States district court in Florida, the lawsuit accuses Ronaldo of “promoting, assisting in, and/or actively participating in the offer and sale of unregistered securities in coordination with Binance”.
This legal action stems from a partnership formed in mid-2022 between Ronaldo and Binance, where the soccer icon promoted a series of his nonfungible tokens (NFTs) tied to the platform. The plaintiffs argue that Ronaldo's promotions played a significant role in encouraging his vast following to use Binance for various investments.
They claim these investments included unregistered securities, such as Binance’s BNB and its crypto yield programs. “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 complaint states.
Ronaldo’s massive social media presence, boasting 850 million followers, was highlighted as a crucial factor in Binance’s growing popularity. The lawsuit alleges that searches for Binance spiked by 500% following the initial sale of Ronaldo's NFTs, indicating his significant influence in boosting the exchange's profile.
Legal and Regulatory Backdrop
The suit also points to guidance from the U.S. Securities and Exchange Commission (SEC), emphasizing the responsibility of celebrities to disclose any payments received for promoting cryptocurrencies.
The plaintiffs claim that Ronaldo did not adhere to these disclosure requirements. The lawsuit, filed by Michael Sizemore, Mikey Vongdara, and Gordon Lewis, seeks damages and funds to cover legal fees. Meanwhile, Binance and its founder Changpeng “CZ” Zhao are navigating their legal challenges.
They recently pleaded guilty and agreed to pay a $4.3 billion settlement to the U.S. government for violations of Anti-Money Laundering laws and operating an unregistered money-transmitting business. Zhao has resigned as CEO and potentially faces up to 18 months in prison.
Additionally, Binance has consented to up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury.