Cristiano Ronaldo is in trouble for a lawsuit filed in a United States district court in Florida. The lawsuit alleges that Ronaldo promoted the cryptocurrency exchange Binance, which is currently facing legal challenges related to the sale of unregistered securities.
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The legal stems from a multiyear partnership entered into between Binance and Cristiano Ronaldo in mid-2022, focusing on the promotion of the soccer star’s non-fungible tokens (NFTs).
At least three of Ronaldo’s NFT collections were directly linked to Binance. The lawsuit, dated November 27, claims that Ronaldo actively participated in the offer and sale of unregistered securities in coordination with Binance.
The filing contends that users who signed up for Ronaldo’s NFTs were more likely to engage in other activities on the Binance platform, such as investing in what the plaintiffs assert are unregistered securities.
These include Binance’s native token BNB and its crypto yield programs. The complaint argues that Ronaldo’s influence and reach, with a 850 million followers across social media.
The lawsuit’s impact Ronaldo’s NFT sales had on promoting Binance, causing a uptick in searches for the exchange. Reports suggest a 500% increase in searches in the week following the NFT sale.
The plaintiffs claim that Ronaldo, given his investment experience and resources, should have been aware of Binance’s alleged involvement in selling unregistered crypto securities.
The matter lies in the plaintiffs’ assertion that Ronaldo failed to disclose payments received for promoting cryptocurrencies, a violation of guidance provided by the U.S. Securities and Exchange Commission (SEC).
The SEC addressed the importance of celebrities disclosing payment details when endorsing investment opportunities, including crypto-asset securities.
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The lawsuit has been brought forth by three plaintiffs, Michael Sizemore, Mikey Vongdara, and Gordon Lewis. They seek damages exceeding $1 billion and funds to cover legal fees.
This development comes amid Binance and its founder Changpeng Zhao facing their own set of legal challenges.
Binance recently pleaded guilty to Anti-Money Laundering law violations and running an unregistered money-transmitting business, resulting in a $4.3 billion settlement with the U.S. government.
Zhao has stepped down as CEO and faces imprisonment for up to 18 months. Binance has agreed to up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury.
The SEC has also sued Binance, accusing it of selling unregistered securities and reportedly investigating misappropriation of customer funds.
Nigel Green, the boss of consultancy firm DeVere Group, weighs in on the situation, addressing that blaming Ronaldo alone oversimplifies an issue.
He directs attention towards global regulators, criticizing their slow pace in establishing clear guidelines for the financial industry.
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In November 2022, Binance announced its first “CR7” collection of non-fungible tokens (NFTs) in partnership with Ronaldo.
NFTs, virtual assets bought and sold digitally, have gained popularity as a means of ownership of online content.
Ronaldo, in a social media video, expressed the intention to “change the NFT game and take football to the next level.” However, the cheapest NFT from the collection, initially priced at $77, plummeted to about $1 a year later.
The claimants in the lawsuit assert that Ronaldo’s promotion of Binance led to a 500% increase in searches for the crypto exchange.
They argue that this surge in interest prompted people to invest in what they call unregistered securities, such as Binance’s BNB cryptocurrency.
According to the U.S. Securities and Exchange Commission (SEC), these assets can be considered securities.
As of now, neither Ronaldo nor Binance has responded to the BBC’s requests for comment on the lawsuit. However, a recent social media post from Ronaldo suggests that he and Binance have plans to work together again in the future, stating they are “cooking something up”.
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