- Plaintiffs accuse Ronaldo of helping Binance sell unregistered securities
- Online searches for Binance rose by 500% after he started promoting it
- He didn't disclose what payment he received from the exchange
A group of plaintiffs has filed a class-action lawsuit against football superstar Cristiano Ronaldo for suffering financial losses connected to his promotion of Binance, crypto.news reported.
He helped Binance sell unregistered securities
Michael Sizemore, Mikey Vongdara, and Gordon Lewis filed the lawsuit on Nov. 27 in Florida. They accuse Ronaldo of helping Binance sell unregistered securities. Ronaldo and the exchange signed an exclusive multiyear deal in 2022, in which the superstar agreed to promote a series of non-fungible tokens (NFT) on the platform.
The plaintiffs allege that the footballer’s promotion encouraged users to do more than buy his NFTs. They were also led to invest in other Binance offerings, some of which turned out to be unregistered securities. Those included crypto yield programs and Binance Coin (BNB).
The veneer of safety
They further claim that Binance’s partnerships with Ronaldo and other celebrities aimed to use the latter’s excellent reputation to convince users that the exchange was safe for buying and selling cryptocurrency.
Their lawsuit draws attention to Ronaldo’s significant influence – the superstar has almost a billion followers across social networks. According to their legal team, his followers substantially boosted Binance’spopularity as searches for Binance rose 500% after he started promoting it.
The complaint also asserts Ronaldo should not have promoted a financial product because he has never been an investment expert.
Binance vs. US federal regulators
Federal regulators allege Binance let US customers sign up withoutimplementing proper know-your-customeror anti-money laundering procedures. Binance will pay penalties of $4.3 billion to various watchdogs and let agencies oversee its operations in the next five years.
As part of Binance’s settlement with the US Department of Justice, its founder Changpeng Zhao resigned as CEO.
The lawsuit evokes the Securities and Exchange Commission’s (SEC)guidelines, according to which celebritiesmust disclose any payments received for promoting cryptocurrencies. The plaintiffs claim Ronaldo did not meet this requirement. Apart from damages, they are seeking coverage of legal fees in the lawsuit.
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