Cristiano Ronaldo is currently entangled in a billion-dollar class-action lawsuit regarding his promotion of non-fungible tokens (NFTs) linked to the beleaguered cryptocurrency exchange Binance. Filed in the federal court in the Southern District of Florida, the lawsuit asserts that Ronaldo’s endorsements of Binance were “deceptive and unlawful,” leading investors to make costly and unsafe investments.
The legal action seeks damages exceeding $1 billion (£790 million) and contends that the collaboration between Ronaldo and Binance played a role in promoting unregistered securities, ultimately causing financial harm to the plaintiffs. The suit alleges that Binance’s fraudulent activities were aided by partnerships with influential organizations and celebrities, including Ronaldo.
Ronaldo’s association with Binance commenced with the launch of his inaugural NFT collection, named “CR7,” in collaboration with the cryptocurrency exchange in November of the previous year, just ahead of the 2022 World Cup. The NFTs, showcasing animated statues of Ronaldo from pivotal moments in his life, garnered significant attention, with starting prices ranging from $77 to $10,000.
According to the lawsuit, Ronaldo’s promotional efforts were highly successful, resulting in a claimed 500% increase in online searches for the keyword “Binance” after the announcement of the NFT collection. Premium-level NFTs from the CR7 collection reportedly sold out within the first week.
The claimants argue that Ronaldo should have disclosed the compensation he received from Binance for the partnership, citing US Securities and Exchange Commission (SEC) regulations that mandate celebrities to disclose payments when endorsing securities, including cryptocurrencies.
This legal action comes on the heels of Binance’s recent troubles, including accusations of operating as an unregistered securities exchange and violating US securities laws, resulting in a roughly $4 billion settlement. Binance’s founder, Changpeng Zhao, stepped down as CEO and pleaded guilty to a felony related to failure to prevent money laundering on the platform.
Cryptocurrency industry scandals and market meltdowns have prompted increased scrutiny from regulators. Last year, other celebrities, including Larry David and Tom Brady, faced a class-action suit over their endorsements of the collapsed crypto exchange FTX. The lawsuit argued that celebrities were complicit in promoting FTX’s failed business model due to their influential status.
As Ronaldo confronts this legal challenge, attention is also shifting towards global regulators, with experts emphasizing the need for clearer guidelines in the rapidly evolving financial landscape surrounding cryptocurrencies. The outcome of this lawsuit may have broader implications for how celebrities engage with and endorse cryptocurrency-related ventures.
