Justin Setterfield/Getty Images
Cristiano Ronaldo photo taken in October 2023.
New York
CNN
—
Football superstar Cristiano Ronaldo faces a $1 billion class-action lawsuit over his promotion of Binance, the world’s largest cryptocurrency exchange.
The lawsuit, filed Tuesday in Florida state court, alleges that Ronaldo “coordinated with Binance to promote, assist and/or actively participate in the issuance and sale of unregistered securities,” including the sale of his own non-fungible tokens (NFTs) to investors. brought huge economic losses.
Binance did not immediately respond to a request for comment CNN has requested comment. Ronaldo’s representatives declined to comment.
In November 2022, Ronaldo partnered with Binance to sell a unique NFT depicting “iconic Ronaldo moments immortalized in the form of a digital statue,” the company said in its highly publicized launch, including on its social media in the media.
NFTs are a crypto-related phenomenon that has become mainstream, essentially turning digital artwork and other collectibles into unique, verifiable assets that are easily traded on the blockchain.
The lawsuit accuses Ronaldo of making “deceptive statements” and claims he “allowed his name and likeness to be used to make deceptive statements in the promotion of Binance products,” specifically the sale of unregistered cryptocurrency securities that are prone to wild swings.
The plaintiff also accuses Ronaldo of failing to disclose “the form or amount of compensation from Binance” as required by U.S. law, claiming Binance and Ronaldo “Know that these ads are targeting consumers who are unfamiliar with cryptocurrency.”
SEC Chairman Gary Gensler said celebrities must “disclose to the public from whom and how much you are compensated to promote investments in securities,” according to the lawsuit. Last year, the U.S. Securities and Exchange Commission (SEC) fined Kim Kardashian more than $1 million over similar issues.
The class action lawsuit amounts to “more than” $1 billion.It is worth noting that Ronaldo is Still promoting the company, including most recently posting a Binance ad on November 28 on his X account, which has 110 million followers.
Other celebrities have been targeted with similar lawsuits. Last year, Tom Brady, Gisele Bundchen and others were sued by FTX investors for supporting the now-defunct cryptocurrency platform. The lawsuits accuse the public figures of failing to properly disclose their relationships with digital financial institutions. Brady, Bündchen and the other defendants deny the allegations in the complaint and have moved to dismiss the case.
Celebrities including Kardashian and Floyd Mayweather, Jr. faced another cryptocurrency lawsuit early last year, alleging that cryptocurrency Ethereum Max executives conspired with celebrity promoters to induce investments Investors purchase EMax tokens, driving up its price and allowing them to make a profit. The lawsuit was later dismissed by a federal judge, who said it was unclear which investors actually saw the promotion.
Cornell Law School professor Charles Whitehead previously told CNN that using cryptocurrencies has a different meaning than supporting sports drinks or sportswear.
“Selling a financial instrument asset … is not the same as selling sneakers,” Whitehead said. “All these celebrities running around and making sponsorships like this should stop and ask a securities lawyer.”
Binance has also found itself in the spotlight. Last week, the company agreed to pay more than $4 billion in fines and other penalties. Its founder, Changpeng Zhao, agreed to resign as CEO of the exchange he founded and subsequently pay $200 million.
After years of investigations, U.S. authorities said Binance allowed bad actors onto the platform to enable transactions related to child sexual abuse, drugs and terrorism financing.
Zhao faces up to 10 years in prison, although his final sentence is likely to be much lower. He also agreed to pay a $50 million criminal fine and a $150 million civil penalty.
“I made a mistake and I must take responsibility.” Zhao Posted on X. “This is what’s best for our community, Binance, and myself. Binance is no longer a baby. “It’s time for me to let it walk and run.” ”
U.S. officials said it was the largest-ever corporate resolution and included criminal charges against executives.
– CNN’s Jennifer Korn and Allison Morrow contributed to this report.