Football icon Cristiano Ronaldo is facing a massive $1 billion class-action lawsuit over allegations that his endorsement of the cryptocurrency exchange Binance played a significant role in promoting the sale of unregistered securities.
The lawsuit, filed on November 27 in a U.S. district court in Florida, accuses Ronaldo of actively participating in the offer and sale of these securities in collaboration with Binance.
The legal action stems from a multiyear agreement announced in mid-2022, where Ronaldo partnered with Binance to promote his own nonfungible tokens (NFTs).
At least three of Ronaldo's NFT collections were linked to Binance, and the lawsuit argues that his promotions encouraged investments in unregistered securities, leveraging his massive social media following of 850 million followers.
Plaintiffs Michael Sizemore, Mikey Vongdara, and Gordon Lewis, who claim losses from Ronaldo's endorsement of Binance, filed the class-action complaint.
They seek monetary damages and coverage for legal expenses. The lawsuit alleges that Ronaldo's NFT sales significantly boosted Binance's popularity, causing a 500% surge in searches for the exchange after the initial sale.
The legal complaint asserts that Ronaldo, with his investment experience and resources, should have been aware of Binance's alleged sale of unregistered crypto securities.
It references Securities and Exchange Commission (SEC) guidelines that require celebrities to disclose compensation received for promoting cryptocurrencies, which the complaint alleges Ronaldo failed to do.
Meanwhile, Binance and its founder Changpeng "CZ" Zhao are entangled in their own legal troubles. Binance recently pleaded guilty to anti-money laundering crimes and operating an unlicensed money-transmitting firm, resulting in a $4.3 billion settlement with U.S. authorities.
Zhao resigned as CEO, facing a potential 18 months in jail, and Binance has consented to a five-year compliance monitoring period by the U.S. Departments of Justice and Treasury. The SEC has also filed a lawsuit against Binance, alleging the marketing of unregistered securities and examining potential misappropriation of client funds.
