Cristiano Ronaldo at the Center of Class-Action Lawsuit Tied to Binance

Cristiano Ronaldo at the Center of Class-Action Lawsuit Tied to Binance

Time Stamp: December 4, 2023 1:26 AM
Cristiano Ronaldo at the Center of Class-Action Lawsuit Tied to Binance PlatoBlockchain Data Intelligence. Vertical Search. Ai.
  • Cristiano Ronaldo faces a proposed class-action lawsuit linking him to alleged securities violations.
  • The lawsuit claims Ronaldo’s endorsements prompted users to invest in unregistered securities on Binance, leveraging his massive social media influence.
  • Amid Binance’s legal troubles, it includes a $4.3 billion settlement and SEC allegations.

Pro-footballer Cristiano Ronaldo is at the center of a proposed class-action lawsuit involving his deal with cryptocurrency exchange Binance. Plaintiffs allege they suffered financial losses due to Ronaldo’s promotion of the embattled cryptocurrency exchange Binance. The lawsuit, filed on November 27 in a United States district court in Florida, contends that Ronaldo played an active role in promoting and selling unregistered securities in collaboration with Binance.

The legal entanglement arises from Binance’s strategic partnership with Ronaldo in mid-2022, aimed at promoting a series of the soccer star’s nonfungible tokens (NFTs). Notably, at least three of Ronaldo’s NFT collections were intricately tied to Binance. The crux of the complaint revolves around the assertion that users who engaged with Ronaldo’s NFTs were more likely to use Binance for other activities, including investments in what the plaintiffs claim are unregistered securities—specifically, Binance’s native BNB token and its cryptocurrency yield programs.

According to the lawsuit, Ronaldo’s high-profile endorsements served to solicit investments in these alleged unregistered securities by leveraging his vast influence. The complaint emphasizes that Ronaldo, with a staggering 850 million followers across various social media platforms, significantly contributed to Binance’s popularity. It goes on to claim that the sales of Ronaldo’s NFTs were “incredibly successful” in promoting the exchange, evidenced by a remarkable 500% increase in searches for Binance in the week following the initial NFT sale.

Why the Plaintiff sued Cristiano Ronaldo and not Binance

The crux of the Plaintiff’s argument is that Cristiano Ronaldo, with his extensive investment experience and considerable resources, knew or should have known about Binance’s alleged sale of unregistered crypto securities. The complaint cites guidance from the U.S. Securities and Exchange Commission (SEC), highlighting the obligation for celebrities to disclose payments received for promoting cryptocurrencies—a duty the plaintiffs claim Ronaldo neglected.

The class-action lawsuit is spearheaded by plaintiffs Michael Sizemore, Mikey Vongdara, and Gordon Lewis. They seek damages and funds to cover legal fees, positioning themselves as aggrieved parties in Ronaldo’s endorsement of what they contend are illicit financial instruments.

While Ronaldo’s involvement adds a layer of complexity to the legal saga, it is essential to recognize that Binance is grappling with its own set of legal challenges. The cryptocurrency exchange and its founder, Changpeng “CZ” Zhao, recently pleaded guilty and agreed to a substantial $4.3 billion settlement with the U.S. government.

This settlement is in response to violations of Anti-Money Laundering laws and operating an unregistered money-transmitting business. In a consequential move, Zhao has stepped down as CEO and potentially faces an 18-month prison sentence. Furthermore, Binance has committed to undergoing up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury.

RELATED: Binance Appoints Richard Teng as CEO Amid Legal Challenges and Leadership Transition

The SEC has also entered the legal fray, filing a lawsuit against Binance. Among other charges, the SEC alleges the sale of unregistered securities, and there are ongoing reports of an investigation into potential misappropriation of customer funds by Binance.

The interconnected legal challenges Ronaldo and Binance face underscore the intricate and often murky terrain surrounding cryptocurrency promotions and transactions. As regulatory scrutiny intensifies, the landscape demands transparency, due diligence, and compliance from all parties involved—celebrities endorsing crypto platforms or the platforms facilitating cryptocurrency transactions.

The Ronaldo-Binance lawsuit also prompts reflection on the broader implications for the cryptocurrency industry. Celebrity endorsements have become a powerful tool for raising awareness and driving adoption. Still, the legal fallout from such engagements underscores the need for a careful balance between promotion and regulatory adherence.

As we navigate this evolving legal landscape, it is clear that the cryptocurrency industry must reckon with increased scrutiny and regulatory oversight. Celebrities, influencers, and platforms alike are facing the imperative to uphold ethical standards, disclose affiliations, and operate within the bounds of the law.

In conclusion, the confluence of legal challenges involving Cristiano Ronaldo and Binance is a microcosm of the intricate dynamics in the crypto space. The lawsuit sheds light on the risks associated with high-profile endorsements, emphasizing the need for comprehensive regulatory frameworks and heightened awareness within the industry. As the legal saga unfolds, it will undoubtedly contribute to the ongoing discourse on the intersection of celebrity endorsements, cryptocurrency, and regulatory compliance.

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