Cristiano Ronaldo has been sued a significant amount exceeding $1 billion for promoting Binance, a cryptocurrency exchange company.
The football star is now facing a class-action suit after three men identified as Michael Sizemore, Mikey Vongdaram, and Gordon Lewis claimed that Ronaldo’s influencing of Binance led them to make loss-making investments. Hence, they are seeking damages of a sum exceeding $1 billion (£790 million).
Ronaldo “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance,“ the class action lawsuit read in part.
The trio, in their lawsuit, made known that Ronaldo knowingly or unknowingly assisted Binance in soliciting US customers when the company did not have regulatory approval to do so.
“Binance feigned efforts to exclude U.S. customers from Binance.com but knowingly and intentionally permitted and even encouraged certain U.S.-based customers to use Binance.com,” they argued in the document, referencing how the company and its CEO recently pleaded guilty to money laundering among other charges.
How Binance used Ronaldo
It would be recalled that a year ago, in what appeared to be a collaboration with Ronaldo, Binance unveiled its inaugural “CR7” collection of non-fungible tokens (NFTs), which the football player claimed would reward supporters “for all the years of support”.
Fintech Telex understands that NFTs are digital assets that may be purchased and sold. They do not possess a physical form. They are often used to indicate who owns anything, such as an image or video that is posted online.
When the collection’s NFT went on sale in November 2022, it was listed at $77. In less than a year, the price dropped to around $1.
Citing the price drop, the plaintiffs stated that Binance saw a “500% increase in searches” after Ronaldo influenced and promoted the cryptocurrency exchange, which is based in the Cayman Islands.
“Given Ronaldo’s investment experience and vast resources to obtain outside advisors, he knew or should have known of potential concerns about Binance selling unregistered crypto securities and/or that he was aiding and abetting Binance’s fraud and/or conversion,” the 129-page document read.
Other concerns…
The class action lawsuit was filed barely a week after the US Justice Department ordered the company to pay $4.3 billion (£3.4 billion) in fines and forfeitures.
It had accused Binance of assisting users in circumventing global sanctions and helping criminals and terrorists to move money.
Amid all these, Changpeng Zhao, the Chief Executive Officer of Binance, resigned after admitting to money-laundering offenses.
In a similar development, class action lawsuits were also filed on the same day against Major League Baseball, Formula One for its marketing of failing cryptocurrency exchange FTX.
FTX, the Bahamas-based digital currency exchange at one stage valued at $32 billion, filed for bankruptcy last year. However, early this month, its founder, Sam Bankman-Fried was found guilty by a New York court of multiple counts of fraud and conspiracy.
This implosion has prompted scrutiny of the exchange’s celebrity endorsements and sponsorship deals.
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