Football star, Christiano Ronaldo is facing a lawsuit for promoting the legally troubled cryptocurrency exchange, Binance. According to a report by Coin Telegraph, Ronaldo has been hit with a proposed class-action lawsuit for allegedly promoting investments in unregistered securities on the crypto exchange. The plaintiffs claim to have suffered losses from his promotion, particularly, from his Binance-tied non-fungible tokens (NFTs).
Ronaldo signed a multi-year partnership agreement with Binance in 2022. As part of the agreement, Binance was to create a series of NFT collections for sale on the company’s platform, according to Reuters. Yesterday, the football icon shared a post on X (formerly Twitter) potentially implying a new collaboration with the exchange.
In a November 27 filing, the plaintiffs claim that the five-time Ballon d’Or winner “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance.” The complaint further claims that Ronaldo’s influence and reach, given his 850 million followers across social media, was a key part of Binance’s growth and popularity. The week following the initial sale would see a 500% increase in searches for Binance. The complaint further argues that this NFT sale was “incredibly successful” at promoting the crypto exchange.
The lawsuit further adds that market participants who bought Ronaldo’s NFTs tied to Binance were likely to use the cryptocurrency exchange for other purposes like investing in the alleged “unregistered securities.”
The lawsuit filing states, that Ronaldo knew or should have known “about Binance selling unregistered crypto securities,” because he has “investment experience and vast resources to obtain outside advisers.”
While the U.S. Securities and Exchange Commission (SEC) has guidelines requiring celebrities to disclose the nature, source and amount of compensation received from the promotion of any crypto asset security, the plaintiffs allege that Ronaldo failed to do so.
Binance is still the world’s largest cryptocurrency exchange by trading volume despite recent legal troubles. Legal battles with the U.S. Department of Justice and other agencies have seen its co-founder Changpeng Zhao, commonly referred to as CZ, step down as CEO and plead guilty to several federal charges. The cryptocurrency exchange also agreed to pay about $4.3 billion settlement as part of the guilty plea.
Financial advisors have pointed out the lack of a comprehensive regulatory framework for the crypto market. Nigel Green, CEO and Founder of global financial consulting firm, deVere Group, adds, “While regulatory frameworks are crucial, investors also bear a responsibility to educate themselves and exercise due diligence when navigating the cryptocurrency space.”