Friday, March 1, 2024

Cristiano Ronaldo hit with $1.5 billion lawsuit over major Binance crypto scandal

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Football superstar Cristiano Ronaldo has been hit with a $1 billion USD ($A1.5bn) class action lawsuit for promoting under-fire cryptocurrency exchange Binance.

The lawsuit was filed in federal court in the Southern District of Florida on Monday. It alleges that Ronaldo’s promotion of Binance was “deceptive and unlawful” and convinced them to invest in “unregistered securities” like Binance’s own cryptocurrency, BNB.

Ahead of the 2022 World Cup, the Portuguese star partnered with Binance to release a range of NFTs – non-fungible tokens – celebrating his life.

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The collection of seven animated statues ranged in starting price from $77 USD to $10,000 USD, but the value has collapsed in the last 12 months, with the cheapest NFT dropping from $77 USD to around $1 USD currently.

NFTs are digital images featuring a unique identifier that are backed by a digital blockchain. This allows them to be collectable items that can be sold or traded – but after booming last year, their popularity and value has largely dropped in 2023.

The suit says that Ronaldo’s promotion of Binance was “incredibly successful”, alleging that online searches for the word “Binance” increased by 500 per cent after the player’s range of NFTs were announced.

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Binance, registered in the Cayman Islands, is the world’s biggest exchange for cryptocurrency and other digital assets.

But it is currently facing a wave of pressure after the company admitted its platform facilitated money laundering, including by providing a mechanism for countries such as Iran to evade boycotts from nations like the US.

The US Justice Department last week ordered the firm to pay $4.3bn USD in fines and money forfeitures.

Binance CEO Changpeng Zhao, one of the most influential figures in global cryptocurrency, resigned from the company.

“Binance enabled nearly $900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk”, a US Justice Department spokesperson said.

This week’s class-action suit now alleges that Ronaldo was influential in the growth of Binance.

“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 currently plays in Saudi Arabia for Al-Nassr.Source: AFP

Under U.S. federal law, celebrities must publicly disclose how much they are being paid to promote securities – which traditionally includes the likes of stocks, but now also includes crypto assets.

The lawsuit claims that Ronaldo did not disclose this as required by the U.S. Securities and Exchange Commission.

The player is not the first celebrity to face a lawsuit over their promotion of cryptocurrency exchanges or online assets. Last year a raft sports stars and Hollywood celebrities including Tom Brady, Stephen Curry, and Naomi Osaka were named as defendants in a class-action law suit against FTX.

FTX was the world’s third-largest cryptocurrency and digital asset exchange but collapsed in November 2022 amid a major fraud scandal, with the celebrities alleged to have played a key role in helping promote the company.

Sam Bankman-Fried, the billionaire founder of FTX, was found guilty of fraud this month.

Ronaldo continues to maintain an active partnership with Binance, and recently posted on social media they are “cooking something up”.

Neither Ronaldo nor Binance have commented on the matter at this point.

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