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Pro-football star Cristiano Ronaldo has been hit with a proposed class-action lawsuit from plaintiffs claiming they suffered losses from his promotion of the now-indicted crypto exchange Binance.
Cristiano Ronaldo To Pay $1 Billion For Promoting Binance
A class action lawsuit filed in Florida on Thursday seeks over $1 billion in damages from Cristiano Ronaldo for his role in promoting the cryptocurrency exchange Binance and his CR7 NFT collection.
The lawsuit alleges that Binance sold unregistered securities and operated illegally in the U.S. Ronaldo lent his celebrity status to hype investments, driving traffic and investors to Binance.
Adam Moskowitz, the plaintiff, wrote, “The binding law… across the country, regarding mass promotion of cryptocurrency and unregistered securities. was recently clarified and reversed.“
Adam argued that under the new standards, “promoters like Cristiano Ronaldo, with a financial incentive for themselves or the financial benefit of the securities issuer (Binance), can be held liable under securities laws for using the internet and social media for mass solicitations of cryptocurrency.”
Binance entered a multiyear partnership with Ronaldo in mid-2022 to promote a series of his nonfungible tokens (NFTs). The premium NFT series featured seven animated digital statues capturing seminal moments from Ronaldo’s illustrious career.
Each scarce NFT depicted Ronaldo in an iconic pose, including his early years in Portugal, breakout trick moves like his legendary stepover and career-defining bicycle kick goals.
The complaint claims users who signed up for Ronaldo’s NFTs were more likely to use Binance for other purposes, such as investing in what they claim are unregistered securities, including Binance’s BNB.
The lawsuit cites Binance’s extensive alleged violations, including operating an unregistered exchange and clearing agency, failing to file suspicious activity reports, and not implementing anti-money laundering controls. In November, Binance paid over $4 billion in penalties for these activities.
Meanwhile, the plaintiffs argue that Ronaldo benefited financially from driving traffic to Binance and should have known his promotions were potentially illegal. They claim that over 100 million Binance users were exposed to Ronaldo’s TV and social media advertisements.
“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,” the lawsuit states.
“Given Mr. Ronaldo’s investment experience and vast resources to obtain outside advisors, he knew or should have known of potential concerns about Binance selling unregistered crypto securities and/or that he was aiding and abetting Binance’s fraud and/or conversion.”
The digital collectibles had starting prices ranging from around $77 to $10,000. New Binance customers who created accounts with his promo code also received a “CR7 Mystery Box” containing one of two special NFTs. There were 777,777 NFTs of each type available.
Attorneys for the plaintiffs believe compensation is the only way to atone for the alleged crime.
“Investors have now lost more than $11 billion dollars and some exchanges such as FTX and Voyager have gone bankrupt, so this complaint is one of the victims’ only avenues to recoup any of those direct losses from these specific promoters,” wrote Moskowitz.
The liability faced by celebrities who dabbled in crypto promotions was starkly expressed by the Securities and Exchange Commission when it filed charges against NBA Hall of Famer Paul Pierce earlier this year.
“The law requires you to disclose to the public from whom and how much you are getting paid to promote investment in securities, and you can’t lie to investors when you tout a security,” SEC Chair Gary Gensler said at the time.
“When celebrities endorse investment opportunities, including crypto asset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements.”
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” added Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
“Investors are entitled to know whether a promotor of a security is unbiased.”
Binance Still In Legal Woes
Meanwhile, Binance and its founder Changpeng “CZ” Zhao are facing their legal woes, pleading guilty and paying the U.S. government a $4.3 billion settlement for violations of Anti-Money Laundering laws and running an unregistered money-transmitting business.
Zhao has stepped down as CEO and may be imprisoned for up to 18 months. Binance has agreed to up to five years of compliance monitoring by the U.S. Department of Justice and the Department of the Treasury.
The SEC has also sued Binance, claiming — among other charges — that it sold unregistered securities and is reportedly investigating if Binance misappropriated customer funds.
