A class action lawsuit filed in Florida on Thursday seeks international soccer star Cristiano Ronaldo to pay more than $1 billion in damages for his role in promoting cryptocurrency exchange Binance.
The lawsuit alleges that Binance sold unregistered securities in the U.S. and operated illegally. Ronaldo claims to have used his celebrity to promote investments and drive traffic and investors to the platform.
“Nationally binding laws regarding mass promotion of cryptocurrencies and unregistered securities have recently been clarified and repealed,” Adam Moskowitz, an attorney for the plaintiffs, wrote. He said that under the new standards, “promoters such as Cristiano Ronaldo who have financial incentives for their own or the financial benefit of the security issuer (Binance) could be held liable under securities laws for their use of the internet and social media for mass solicitation.” “He claimed. of cryptocurrency.”
The lawsuit cites widespread alleged violations by Binance, including operating an unregistered exchange and clearinghouse, failing to submit suspicious activity reports, and failing to implement anti-money laundering controls. In early November, Binance paid more than $4 billion in fines related to these activities.
Meanwhile, the plaintiffs claim that Ronaldo benefited financially by driving traffic to Binance and should have known that his promotion was potentially illegal. They claim that more than 100 million Binance users were exposed to Ronaldo’s advertisements, including on TV and social media.
“Ronaldo’s promotions encouraged millions of followers, fans, and supporters to invest on the Binance platform, thereby causing Binance to solicit or support investments in unregistered securities,” the lawsuit states. “Given Mr. Ronaldo’s investment experience and extensive resources for seeking external advice, he was aware of potential concerns about Binance selling unregistered cryptocurrency securities or aiding and abetting fraud and/or conversion on Binance. “I should have known.”
Last November, Ronaldo teamed up with Binance to launch “CR7,” his first NFT collection, ahead of the 2022 World Cup. The premium NFT series features seven animated digital statues capturing key moments from Ronaldo’s illustrious career. Each of the scant NFTs depicts Ronaldo in iconic poses, including his childhood growing up in Portugal, breakout trick moves like the legendary stepover, and career-defining bicycle kick goals.
Starting prices for digital collectibles ranged from about $77 to $10,000. New Binance customers who created an account with a promo code also “The ‘CR7 Mystery Box’ contains one of two special NFTs. There were 777,777 NFTs of each type available.
Plaintiffs’ attorneys believe compensation is the only way for victims to get justice.
“Investors have now lost over $11 billion and some exchanges, such as FTX and Voyager, have gone bankrupt, so this complaint is one of the only ways for victims to recoup their losses directly from specific promoters,” Moskowitz said. wrote:
The liability facing celebrities who have dabbled in promoting cryptocurrencies was put into stark relief by the Securities and Exchange Commission (SEC) earlier this year when it indicted NBA Hall of Famer Paul Pierce.
“The law requires us to disclose to the public how much we receive from whom to promote investments in securities, and we cannot lie to investors when promoting securities,” SEC Chairman Gary Gensler said at the time. “When a celebrity endorses an investment opportunity, including cryptocurrency securities, investors should carefully research whether the investment is right for them and understand why the celebrity is making such an endorsement.”
SEC Division Director Gurbir S. Grewal added, “Federal securities laws make clear that celebrities or other individuals promoting cryptocurrency asset securities must disclose the nature, source, and amount of compensation received in exchange for their promotion.” Yes. of execution. “Investors have the right to know that securities promoters are unbiased.”
The SEC’s order declared that Pierce violated the anti-touting and anti-fraud provisions of the federal securities laws.
Editor’s note: This story was drafted using Decrypt AI from sources referenced in the text. fact confirmed by Ozawa.