The soccer mogul Cristiano Ronaldo is facing a class-action lawsuit from plaintiffs claiming to have suffered financial losses linked to his promotion of Binance.
The lawsuit was filed on Nov. 27 in a Florida District Court and accuses Ronaldo of aiding in the sale of unregistered securities in collaboration with Binance.
Binance entered a multi-year partnership with Ronaldo in mid-2022.
As per that agreement, Ronaldo promoted a series of non-fungible tokens (NFT) on the platform.
The plaintiffs now allege that Ronaldo’s promotion led users to not only invest in his NFTs, but also to engage with other Binance offerings, including investments in what they claim are unregistered securities, such as Binance’s BNB token and its crypto yield programs.
“Binance’s partnership with celebrities like Ronaldo was clearly designed to use the positive reputation associated with specific celebrities to convince consumers that Binance was a safe place to buy and sell cryptocurrency.”
The complaint highlights the significant influence of Ronaldo who boasts 850 million followers across various social media platforms. Lawyers argue that his following substantially boosted the exchange’s popularity evidenced by a 500% increase in searches for “Binance” following his promotion.
The lawsuit further contends that Ronaldo is an investment novice with no basis to promote a financial product given the legal issues now engulfing the embattled exchange.
It also points to the Securities and Exchange Commission’s (SEC) guidelines, which mandate celebrities to disclose any compensation received for promoting cryptocurrencies – a requirement the plaintiffs claim Ronaldo failed to meet.
Plaintiffs Michael Sizemore, Mikey Vongdara, and Gordon Lewis are seeking damages and coverage of legal fees in the lawsuit.
Binance embroiled in legal issues
Concurrently, Binance and its founder, Changpeng Zhao, are dealing with legal issues of their own, having admitted guilty and agreeing to a $4.3 billion settlement with the US for charges related to money laundering and operating an unregistered money-transmitting business.
Zhao stepped down as CEO and faces up to 18 months in prison, as per federal sentencing guidelines, but some legal experts now speculate that he may face up to 10 years in prison. Binance has agreed to up to five years of compliance monitoring by the Justice Department and Treasury.
The SEC has filed a lawsuit against Binance, alleging, among various charges, the sale of unregistered securities. Reports also indicate that the regulator is investigating potential misappropriation of customer funds by Binance.
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