Cristiano Ronaldo may have won the hearts of millions of soccer fans around the world, but he’s feeling the heat in Florida after being slapped with a class-action lawsuit seeking $1 billion in damages by plaintiffs who claim he toyed with their trust and duped them into making risky bets on the cryptocurrency exchange Binance.
Investors claim Ronaldo’s endless praise and promotion of his non-fungible tokens, or NFTs, on Binance was “deceptive and unlawful” and misled them into believing other crypto assets on the platform were safe and not being invested in unregistered securities. They claim Ronaldo knew the stakes but still chose to promote Binance to his legion of fans, going so far as to include a section on his website that lists Binance as a brand he “believes in.”
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The plaintiffs also allege that the “overarching objective” of Ronaldo’s deal with Binance was to help it “successfully solicit or attempt to solicit investors in Binance’s crypto-related securities from Florida and nationwide.”
Binance is the world’s largest crypto exchange. The company has recently come under fire over its questionable practices and has been accused of operating as an unregistered securities exchange and violating a slate of U.S. securities laws.
Last week, one of Binance’s founders, Changpeng Zhao, pleaded guilty in federal court to violating U.S. anti-money-laundering laws and agreed to step down as CEO.
Crypto exchanges, which have operated for years in the largely unregulated Wild West cyber terrain, have relied on celebrity and sports endorsements to get more people interested in cryptocurrency. Several celebrities have faced backlash for promoting crypto without disclosing financial ties or promoting risky investments to fans.
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“Evidence now reveals that Binance’s fraud was only able to reach such heights through the offer and sale of unregistered securities, with the willing help and assistance of some of the wealthiest, powerful, and recognized organizations and celebrities across the globe — just like Defendant Ronaldo,” the suit reads.
Ronaldo launched his inaugural NFT “CR7” collection with Binance last November, with starting prices of about $77 to $10,000, and featured seven animated statues depicting some of the Portuguese player’s most iconic moments. His collection of premium-level NFTs sold out within the first week. The lawsuit claims that Ronaldo should have disclosed how much Binance paid him for his endorsement, something federal law requires celebrities to do when they promote securities, but that he didn’t and instead led his fans down an unknown path where they lost their investments.
Ronaldo reposted a Binance video on Tuesday and teased that he was “cooking something up” with the company.
Other celebrities in hot water over crypto promotions include actor Larry David and football star Tom Brady. They were named in a class-action lawsuit against FTX, the world’s second-largest crypto exchange. Plaintiffs in that suit say that the endorsement deals and promotions make them culpable.
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FTX founder Sam Bankman-Fried was found guilty on Nov. 2 of seven criminal charges and faces more than 100 years in federal prison when he is sentenced next year.
Bankman-Fried stole $8 billion from customers and investors, blowing it on shopping sprees, sports endorsements, and other purchases.
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