(MENAFN- The Peninsula) Mahmoud Elmazaty |
The Peninsula Online
Doha, Qatar: Cristiano Ronaldo has become the subject of a proposed class-action lawsuit due to his endorsement of the $4.3 billion compensation-struck crypto exchange Binance, currently under legal scrutiny.
A November 27 legal filing in a Florida District Court accuses Ronaldo of "participating in the offer and sale of unregistered securities in conjunction with Binance," as per reports from Binance Square.
The claim suggests that users enticed by Ronaldo's Non-Fungible Tokens (NFTs) were more likely to utilize Binance for additional investments, including those in purported unregistered securities like Binance's own BNB and its crypto yield programs.
The lawsuit contends that Ronaldo, with his investment acumen and access to external advisors, should have been aware of Binance's alleged dealings in unregistered crypto securities.
The filing further argues that the football star failed to disclose compensation for promoting cryptocurrencies, as advised by the Securities and Exchange Commission.
"Ronaldo's promotional activities effectively solicited investments in unregistered securities by urging his vast social media following to engage with the Binance platform," the complaint states.
As a 'paid spokesman' Ronaldo's immense social influence, encompassing over 850 million followers across various platforms, was integral to Binance's growing popularity.
The complaint alleges that his NFT sales significantly boosted the exchange's profile, citing a 500% surge in searches for "Binance" following the initial NFT launch.
In mid-2022, after the UK's Financial Conduct Authority had flagged Binance as a 'significant risk' to consumers, Ronaldo entered into a multi-year promotional partnership with the exchange.
This collaboration involved a series of NFTs linked to Ronaldo, featuring at least three collections associated with Binance.
Binance and its founder Changpeng“CZ” Zhao are confronting their own legal challenges, having recently agreed to a $4.3 billion settlement with the United States government over accusations of money laundering and operating an unregistered money-transmitting business.
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