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The plaintiffs, Michael Sizemore, Mikey Vongdara, and Gordon Lewis, argue that Ronaldo actively took part in endorsing financial products on Binance, which should have been registered with regulators.
Football icon Cristiano Ronaldo is facing a new legal battle, which started this week, as he has been accused of improperly promoting the cryptocurrency exchange Binance. A lawsuit filed on November 27th in a Florida court alleges that Ronaldo encouraged investments in unlawful securities tied to Binance, costing the plaintiffs substantial losses.
The plaintiffs, Michael Sizemore, Mikey Vongdara, and Gordon Lewis, argue that Ronaldo actively took part in endorsing financial products on Binance, which should have been registered with regulators, and they point specifically to Ronaldo’s promotion of his own NFT collection on Binance, as well as the native BNB token and yield programs offered on the exchange.
Binance signed a partnership with Ronaldo in 2022 to promote some of his collections in the form of NFTs. The first collection, which was launched in November 2022, was classified based on his normal, rare, super rare, and super super rare collections. The second set, launched this year in July and named Forever CR7, features 29,000 NFTs that include the football icon’s defining moments, including his awards. These collections attracted a lot of interest from around the world.
According to them, Ronaldo significantly expanded Binance’s reach and indirectly boosted interest in these unregistered securities by leveraging his fame and massive social media following. They also highlighted a 500% surge in searches for Binance within a few days after he launched his NFT collection on the crypto exchange.
The filing stated:
“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.”
Moreover, the lawsuit suggests Ronaldo either knowingly or negligently disregarded proper disclosures around his Binance endorsement deal required by the SEC. As an experienced investor, the plaintiffs claim the football star should have recognized issues with the crypto assets tied to his partnership.
More Troubles for the Embattled Crypto Firm
The legal action comes amid ongoing turmoil for Binance itself. Earlier this month, the Department of Justice announced a $4.3 billion settlement with Binance to resolve anti-money laundering violations. Binance’s CEO, Changpeng Zhao, also recently stepped down after pleading guilty to money laundering. The final judgment concerning the case may not come until early 2024. With this, no one knows what could turn out before the final court decision is made.
Beyond the aforementioned issues, Binance continues to battle a separate lawsuit from the SEC accusing the exchange of illegally selling securities. The agency has further opened an investigation into the potential misuse of customer assets on the platform.
With Binance engulfed in legal troubles, the new lawsuit naming Cristiano Ronaldo threatens additional headaches for the embattled crypto firm. The case seeks unspecified damages and legal fees stemming from losses the plaintiffs allegedly endured from investments touted by the football icon.