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Global football sensation Cristiano Ronaldo is now at the center of a class-action lawsuit filed in a Florida District Court on November 27.
The lawsuit, brought forward by investors Michael Sizemore, Mikey Vongdara, and Gordon Lewis, contends that Ronaldo's endorsement of the cryptocurrency exchange Binance played a significant role in causing financial losses for investors. The core accusation revolves around Ronaldo's active promotion and involvement in the sale of what the lawsuit claims are unregistered securities on the Binance platform.
Ronaldo's Influence and Alleged Knowledge
Ronaldo partnered with Binance to promote his non-fungible tokens (NFTs). These digital collectibles, which represent ownership of unique items, were linked to Binance's platform. Through the partnership, Binance reportedly intended to attract new users by leveraging Ronaldo's popularity and reach.
The lawsuit demonstrates Ronaldo's vast influence, backed by an impressive following on social media of 850 million. It alleges that Ronaldo, given his investment experience and vast resources, either knew or should have known about Binance's sale of unregistered crypto securities.
The plaintiffs argue that he had the means to obtain external advice and failed to disclose crucial information to his followers. According to the lawsuit, Ronaldo failed to comply with guidelines issued by the SEC warning celebrities that they must disclose payments received for promoting cryptocurrencies.
Three specific NFT collections tied to Ronaldo and Binance are mentioned in the lawsuit, suggesting a correlation between these NFT sales and increased usage of Binance for other activities.
The complaint further highlights the success of Ronaldo's NFT sales in promoting Binance, citing a notable 500% increase in searches for Binance in the week following the initial sale.
Binance's Legal Troubles
As Ronaldo deals with legal issues, Binance and its founder, Changpeng Zhao, are no strangers to legal proceedings. On Nov. 21, Binance agreed to a substantial $4.3 billion settlement with U.S. authorities in response to money laundering charges and allegations of operating an unregistered money-transmitting business.
As part of the settlement, CZ stepped down as CEO and faces a potential 18-month prison term. Additionally, Binance agreed to up to five years of compliance monitoring by the U.S. Justice Department and Treasury.
The SEC has initiated legal action against Binance, alleging various violations, including the sale of unregistered securities. Additionally, the regulatory agency is investigating the alleged misappropriation of customer funds by the exchange, complicating the legal landscape surrounding one of the largest cryptocurrency platforms in the world.