Cristiano Ronaldo, the famous footballer, is now facing a class-action lawsuit for promoting Binance, a cryptocurrency exchange that is currently involved in legal proceedings. The lawsuit alleges that Ronaldo actively participated in offering and selling unregistered securities through Binance. In 2022, Ronaldo signed a multi-year partnership with Binance to promote various collections of non-fungible tokens (NFTs), some of which were directly linked to Binance. The lawsuit claims that those who acquired Ronaldo’s NFTs were incentivized to use Binance for investing in unregistered securities. Ronaldo’s influence with 850 million social media followers is believed to have played a significant role in the success of Binance.
Accusations Against Ronaldo and Binance’s Legal Controversies with the SEC
The lawsuit argues that Ronaldo, with his investment experience and resources, should have been aware that Binance was selling unregistered crypto securities. Additionally, Ronaldo is accused of not complying with the guidelines set by the United States Securities and Exchange Commission (SEC) regarding disclosure of payments received for promoting cryptocurrencies. The plaintiffs are seeking damages and legal expenses coverage through the class action. Meanwhile, Binance and its founder Changpeng “CZ” Zhao are facing their own legal troubles, including violations of anti-money laundering laws and selling unregistered securities. The SEC has also sued Binance for these alleged violations.
SEC Investigation into Binance US and Possible Parallels with FTX
The SEC has recently intensified its investigations into Binance US following accusations against Binance and former CEO Changpeng Zhao by the Department of Justice (DOJ). The ongoing lawsuit claims that client funds have been put at risk. The SEC is now looking for similarities between this investigation and the one on FTX. They are examining evidence suggesting that Binance US has granted CZ a pathway to control assets, similar to concerns raised about Sam Bankman-Fried of FTX. Although there is currently a lack of concrete evidence, the DOJ’s investigation into Binance could strengthen the SEC’s case. This intensified investigation could have serious consequences for Binance US, including legal actions and financial sanctions.
Hot Take: Potential Impact on Binance’s Reputation and User Base
The SEC’s intensified investigation and potential legal actions against Binance US could undermine user trust and lead to a decrease in the platform’s user base. Negative advertising and legal challenges can also damage Binance’s reputation and influence the broader regulatory context. Currently, trading volumes on Binance US are declining significantly without signs of recovery. However, trading volumes on Binance globally do not seem to be affected at the moment.
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