Celebrity soccer star Christiano Ronaldo has been served a proposed class action lawsuit by three plaintiffs alleging that they incurred losses due to his promotion of the recently embattled crypto exchange Binance.
According to the filing, Ronaldo “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance.“
The Billion Dollar Lawsuit
The plaintiffs, Michael Sizemode, Gordon Lewis, and Mikey Vongdara, all US citizens, filed the lawsuit worth $1 billion with claims that Mr. Ronaldo’s promotion of Binance caused them to “sustain damages for which the defendant (Ronaldo) is liable.”
“In 2022, Mr. Ronaldo entered into a multi-year partnership with Binance that involved the launch of his first ever NFT collection,” stated item no. 39 of the lawsuit
“Mr. Ronaldo was also a paid spokesperson for Binance as part of Binance’s global advertising campaign. Mr. Ronaldo’s promotions were published on public websites, television, and social media accounts accessible to plaintiffs nationwide, including in Florida.”
The suit cited Binance’s partnership with individuals such as Ronaldo to promote the company and “solicit new customers” via traditional advertisements and its “affiliate program,” which provides partners with commissions earned when individuals enroll through their affiliate links.
Violation of the Securities Laws
The lawsuit added that “Binance.com and Binance.US have violated federal and state securities laws by illegally conducting unregistered offers and sales of securities to U.S. investors.”
Binance and Binance US are accused of selling some mentioned tokens and offering some investment programs like the “BNB Vault” and “Simple Earn” and allowing customers to participate in its staking program without registering their offers and sales of the listed tokens with the SEC, the State of Florida, or any other appropriate state agencies.
The suit called Binance and Mr. Ronaldo’s promotional campaigns, featuring Ronaldo’s exclusive NFT collection as “deceptive and unlawful” because the football legend’s promotions helped Binance garner investments in unregistered securities by enticing millions of fans and followers to invest with Binance.
Ronaldo’s Binance Boost
Ronaldo’s aggressive Binance NFT campaigns proved very successful, selling out within one week, and searches related to Binance increased by 500%. However, the lawsuit alleges that people who signed up on Binance to access the premium NFTs were more likely to invest in Binance for other reasons.
“Once users had signed up for Binance to buy or access the NFTs and associated benefits, they were more likely to invest in Binance for other purposes—including in tokens such as the BNB and Binance programs like the “BNB Vault,” “Simple Earn,” and other staking programs that Binance offered.”
In essence, the plaintiffs are convinced that Ronaldo’s promotion of the NFT collection somehow promoted investment in unregistered tokens as well as the exchange’s stake and earn programs.
The lawsuit dated 27th November 2023, is one of the latest strokes targeted at Binance and its partners. Recall that Binance was recently fined $4.3 billion for violating US anti-money-laundering laws and allowing criminal and terrorist organizations to conduct trading activities on its platform.