Soccer superstar Cristiano Ronaldo is facing a $1 billion class action lawsuit for his promotion of Binance, the world’s biggest crypto exchange.
The lawsuit, filed Tuesday in a Florida court, said that Ronaldo “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance,” including selling non-fungible tokens (NFTs) of himself, which led to substantial financial losses for investors.
Binance didn’t immediately respond toCNN’s request for comment. A representative for Ronaldo declined to comment.
In November 2022, Ronaldo partnered with Binance to sell unique NFTs depicting “an iconic Ronaldo moment immortalized in the form of a digital statute,” the company said during its highly publicized launch, including on his social media.
NFTs are a crypto-related phenomenon that went mainstream, essentially transforming digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.
The lawsuit accuses Ronaldo of making “deceptive statements” and claims he “allowed his name and likeness to be used in connection with Binance’s deceptive statements in promotions of its product,” notably selling unregistered crypto securities prone to wild volatility.
Plaintiffs also accuse Ronaldo of not disclosing “the form or amount of his compensation by Binance,” which is required by US law, and allegethat Binance and Ronaldo“knew that these advertisements targeted consumers unfamiliar with crypto.”
Securities and Exchange Commission Chair Gary Gensler has said celebrities must “disclose to the public from whom and how much you are getting paid to promote investment in securities,” the lawsuit said. The SEC fined Kim Kardashian more than $1 million last year for a similar issue.
The class action lawsuit is for a “sum exceeding” $1 billion. Notably, Ronaldo isstill promoting the company, including posting a Binance ad as recently as November 28 on his X account, which has 110 million followers.
Celebrities sued
Other celebrities have also been the target of similar lawsuits. Tom Brady, Gisele Bundchen and others were sued last year by an FTX investor for their endorsement of the now-defunct crypto platform. The lawsuits allege that these public figures did not properly disclose their own involvement with digital financial institutions. Brady, Bundchen and other defendants have denied the allegations in the complaint and moved to dismiss the case.
Kardashian and Floyd Mayweather, Jr., are other celebrities who faced another crypto lawsuit early last year that claimed cryptocurrency EthereumMax executives schemed with celebrity promoters to entice investors to buy the EMax token, driving up its price and allowing them to sell their own tokens at a profit. The suit was later dismissed by a federal judge who said it was not clear that the investors who sued actually saw the promotions.
Plugging crypto has different implications than, say, endorsing a sports drink or athletic wear, Charles Whitehead, professor at Cornell Law School, previously told CNN.
“Selling an asset that is a financial instrument … is not the same thing as selling sneakers,” Whitehead said. “All these celebrities who are running around and doing these sorts of sponsorships should stop and ask a securities lawyer.”
Binance problems
Binance has also found itself the center of attention. Last week, the company agreed to pay more than $4 billion in fines and other penalties. Its founder Changpeng Zhao agreed to step down as CEO from the exchange that he founded, and he will pay $200 million in fines.
Following a multiyear investigation, US authorities said Binance allowed bad actors on the platform, enabling transactions linked to child sex abuse, narcotics and terrorist financing.
Zhao faces a maximum of 10 years behind bars, though his ultimate sentence will likely be far lower. He also agreed to pay a $50 million criminal fine and a $150 million civil penalty.
“I made mistakes, and I must take responsibility,” Zhao posted on X. “This is best for our community, for Binance, and for myself. Binance is no longer a baby. It is time for me to let it walk and run.”
US officials described this as the biggest-ever corporate resolution that includes criminal charges for an executive.
– CNN’s Jennifer Korn and Allison Morrow contributed to this report.
