Lawsuit Targets Cristiano Ronaldo for Endorsing Binance and Alleged Unregistered Securities
Cristiano Ronaldo faces a class-action lawsuit for promoting unregistered securities in collaboration with Binance.
Famed footballer Cristiano Ronaldo is facing a proposed class-action lawsuit, with plaintiffs alleging losses due to his endorsement of the cryptocurrency exchange Binance, now embroiled in legal issues. This lawsuit, filed in a Florida district court on November 27, accuses Ronaldo of being involved in promoting and selling what are claimed to be unregistered securities in collaboration with Binance.
Ronaldo's partnership with Binance, initiated in mid-2022, focused on promoting his personal nonfungible token (NFT) collections, with at least three series linked to the exchange. The plaintiffs argue that those who engaged with Ronaldo's NFTs were more inclined to use Binance for additional investments, including in Binance's BNB and its cryptocurrency yield programs, which they assert are unregistered securities.
“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 lawsuit contends that Ronaldo's promotional activities helped Binance in attracting investments in these securities, leveraging his extensive social media following of 850 million. The complaint notes a significant spike in Binance searches following his NFT sales, indicating his substantial role in boosting the exchange's profile.
The plaintiffs assert that Ronaldo, given his investment experience and access to expert advice, should have been aware of Binance's alleged involvement in selling unregistered crypto securities. The lawsuit references SEC guidelines that emphasize the need for celebrities to disclose any compensation received for promoting cryptocurrencies, an obligation the plaintiffs claim Ronaldo neglected.
The lawsuit, brought forward by Michael Sizemore, Mikey Vongdara, and Gordon Lewis, seeks damages and legal fee reimbursement.
In parallel, Binance and its founder Changpeng “CZ” Zhao are navigating their legal challenges, having admitted guilt and settled for $4.3 billion with the U.S. government over Anti-Money Laundering violations and operating an unregistered money-transmitting business. Zhao has resigned as CEO and could face a prison sentence of up to 18 months. Binance has consented to up to five years of compliance monitoring by U.S. authorities.
Additionally, the SEC has filed a lawsuit against Binance, alleging the sale of unregistered securities among other charges, and is reportedly investigating potential misappropriation of customer funds by the exchange.