The class-action lawsuit alleges that soccer star Cristiano Ronaldo, associated with Binance-tied NFTs, endorsed investments in unregistered securities on the cryptocurrency exchange. In a filing dated November 27 to a United States district court in Florida, plaintiffs asserted that Ronaldo played a role in the promotion, assistance, and/or active participation in the offer and sale of unregistered securities in collaboration with the legally embroiled crypto exchange Binance. Ronaldo’s partnership with Binance, initiated in mid-2022, aimed to promote a series of his nonfungible tokens (NFTs), with at least three of these collections linked to this exchange.
According to the complaint, individuals who registered for Ronaldo’s NFTs were more inclined to use this exchange for various purposes, including investing in what the plaintiffs argue are unregistered securities, such as Binance’s BNB cryptocurrency, which has seen its value decline to $230, 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.”
Cristiano Ronaldo and Binance in Hot Water
According to the complaint, Ronaldo played a crucial role in enhancing Binance’s increasing popularity by leveraging his influence and extensive reach, boasting 850 million followers across various social media platforms. The document contends that his NFT sales were highly effective in promoting the exchange, resulting in a notable 500% surge in searches for this exchange during the week following the initial sale, indicating the significant impact of his involvement.
The lawsuit contends that Cristiano Ronaldo either knew or should have been aware of this cryptocurrency exchange’s sale of unregistered cryptocurrency securities, given his “investment experience and vast resources to obtain outside advisers.” The complaint 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 the lawsuit alleges Ronaldo did not fulfill.
The proposed class-action lawsuit is brought forth by Michael Sizemore, Mikey Vongdara, and Gordon Lewis, who are seeking damages and financial support for legal expenses. Concurrently, Binance and its founder Changpeng “CZ” Zhao are grappling with legal challenges, having pleaded guilty and paid a $4.3 billion settlement to the U.S. government for Anti-Money Laundering law violations and running an unregistered money-transmitting business.
Zhao, who has stepped down as CEO, faces a potential 18-month prison sentence. Binance has agreed to up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury. Additionally, the SEC has filed a lawsuit against this exchnage, alleging, among other charges, the sale of unregistered securities, and is reportedly investigating whether this exchange misappropriated customer funds.