The world’s largest cryptocurrency exchange, Binance, is the target of a $1 billion class action lawsuit brought against soccer star Cristiano Ronaldo.
Ronaldo “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance,” according to the lawsuit, which was filed on Tuesday in a Florida court. This included selling non-fungible tokens (NFTs), which caused investors to suffer significant financial losses.
CNN contacted Binance for comment, but they didn’t get back to them right away. Ronaldo’s representative opted not to respond.
Ronaldo and Binance teamed up in November 2022 to sell exclusive NFTs that featured “an iconic Ronaldo moment immortalized in the form of a digital statute,” the company announced during its widely reported launch, which included posts on Ronaldo’s social media.
NFTs, a widely recognized phenomenon in the cryptocurrency space, essentially convert digital art and other collectibles into unique, verifiable assets that can be easily traded on the blockchain.
In particular, selling unregistered cryptocurrency securities subject to extreme volatility is one of the ways Ronaldo is accused of making “deceptive statements” and of having “allowed his name and likeness to be used in connection with Binance’s deceptive statements in promotions of its product,” according to the lawsuit.
In addition, the plaintiffs claim that Binance and Ronaldo “knew that these advertisements targeted consumers unfamiliar with crypto” and that Ronaldo failed to disclose “the form or amount of his compensation by Binance,” as required by US law.
According to the lawsuit, celebrities are required to “disclose to the public from whom and how much you are getting paid to promote investment in securities,” as stated by Securities and Exchange Commission Chair Gary Gensler. Kim Kardashian was fined over $1 million by the SEC for a similar offense last year.
The lawsuit is a class action with a “sum exceeding” $1 billion in damages. Remarkably, Ronaldo continues to endorse the business; just this past November 28, he shared a Binance advertisement on his 110 million-follower X account.
Celebrities filed lawsuits
Similar lawsuits have also been filed against other celebrities. An FTX investor sued Tom Brady, Gisele Bundchen, and other celebrities last year for their support of the now-defunct cryptocurrency platform. The legal actions assert that these well-known individuals failed to appropriately reveal their personal connections to online financial companies. Brady, Bundchen, and additional defendants have filed a motion to dismiss the case, denying the allegations made in the complaint.
Kardashian and Floyd Mayweather, Jr., among other celebrities, were the targets of another cryptocurrency lawsuit that surfaced early in the year. The lawsuit claimed that EthereumMax executives conspired with celebrity promoters to lure investors to purchase the EMax token, thereby inflating its value and enabling them to profitably sell their own tokens. A federal judge later dismissed the lawsuit, stating that it was unclear whether the investors who filed the suit had actually seen the promotions.
According to Cornell Law School professor Charles Whitehead, promoting cryptocurrency has different ramifications than, say, endorsing sports drinks or athletic apparel, as CNN previously reported.
Issues with Binance
Additionally, Binance has become the center of attention. The business consented last week to pay fines and other penalties totaling over $4 billion. In addition to agreeing to pay $200 million in fines, Changpeng Zhao, the exchange’s founder, agreed to resign as CEO.
After a lengthy investigation, US authorities claimed that Binance permitted bad actors to operate on the platform, facilitating transactions related to the funding of terrorism, drugs, and child sex abuse.