Four recent class action lawsuits were filed against high-profile organizations and individuals for promoting the crypto exchanges, according to court documents filed in Miami on Monday.
Cristiano Ronaldo, Major League Baseball, F1, and Mercedes-Benz and global advertising agency, Dentsu, are among the defendants listed.
The litigations come less than a month after FTX founder, Sam Bankman-Fried, was found guilty on seven different fraud-related charges in Manhattan federal court and less than a week after Binance founder, Changpeng “CZ” Zhao pleaded guilty to violating numerous federal statutes, including the Bank Secrecy Act.
Ronaldo accused of “mass solicitation of unregistered securities”
Three of the lawsuits involve numerous organizations accused of “aiding and abetting and/or actively participating in the massive, multi-billion dollar fraud” committed by FTX through advertising the company as a safe and reputable exchange. The remaining lawsuit alleges Ronaldo, who partnered with Binance, “engaged in mass solicitation of investments in unregistered securities on behalf 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,” reads the filing against the soccer superstar. “Binance’s partnership with celebrities like Ronaldo was clearly designed to use the positive reputation associated with specific celebrities to convince consumers that Binance was a safe place to buy and sell cryptocurrency.”
Zhao, a Dubai resident who was recently ordered to not leave the U.S. by a federal judge, has since resigned from his role as CEO of Binance. Moreover, the crypto exchange must pay $4.3 billion in forfeitures and make a “complete exit” from the U.S. market.
Zhao’s sentencing is currently scheduled for late February 2024.
SBF’s adventures in celebrity-chasing
In Bankman-Fried’s trial, the prosecution alleged the defendant and a number of his associates had undisclosed access to customer funds that they then used to fund their lavish lifestyle, including a $35 million luxury Bahamian penthouse. By the time the crypto exchange collapsed, FTX and its sister company, Alameda Research, had spent $8 billion of customers’ money.
Prosecutors alleged the former “king of crypto” used customer funds to finance various high-profile sponsorship deals, including a $150 million deal with Major League Baseball and $205 million deal with the stadium formerly known as FTX arena in Miami.
Furthermore, numerous celebrities were paid tens of millions to advertise on behalf of FTX, including Larry David, Steph Curry, Tom Brady, and Kevin O’Leary.
Former head of engineering for FTX, Nishad Singh, testified that he was “ashamed” and “embarrassed” about the amount of spending Bankman-Fried was authorizing, telling jurors it all “reeked of excess and flashiness.”
“He was celebrity chasing, and he liked it,” claimed U.S. Assistant Attorney, Nicolas Roos.
What’s next
Bankman-Fried is currently being held at Brooklyn’s Metropolitan Detention Center and could face another trial on additional charges, including foreign bribery, in the spring. His sentencing is scheduled for March 28th, 2024.
Zhao is facing a potential 12-18 months in prison, while Bankman-Fried could spend decades in prison.
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