Football star Cristiano Ronaldo is currently entangled in a class action lawsuit in the United States concerning his endorsement of Binance, the world’s largest cryptocurrency exchange. The prosecutor stated that Ronaldo’s promotion resulted in a massive loss on their investments, and they are seeking damages of approximately $1 billion (£790 million).
In November 2022, Binance introduced its inaugural “CR7” collection of non-fungible tokens (NFTs) in collaboration with Ronaldo. The footballer, in a bid to reward his fans for their years of support, expressed excitement about the partnership. NFTs are digital assets with no tangible existence, often utilized to signify ownership of digital content like images or videos.
Ronaldo shared on X that he is proud to be partnering with Binance. He went further by saying that this would revolutionize the NFT landscape and elevate football to new heights. Despite the initial NFT prices starting at $77 in November 2022, the value plummeted to around $1 a year later.
They argue that Ronaldo’s promotion led to a significant “500% increase in searches” for Binance, a cryptocurrency exchange registered in the Cayman Islands. They also stated that people were induced to invest in what they deem “unregistered securities,” like Binance’s BNB cryptocurrency.
The prosecutor stated that Ronaldo failed to disclose the amount he was being paid for the endorsement. Nigel Green, CEO of DeVere Group, emphasized that the issue extends beyond Ronaldo, urging attention to global regulators’ slow progress in establishing clear guidelines for this evolving financial landscape.
According to the US Securities and Exchange Commission (SEC), such assets may be classified as securities, and if celebrities must endorse them, they must adhere to US laws, including disclosure of compensation details.
Despite the legal challenges, Ronaldo and Binance still have plans to work together in the future. This was shared on X when Ronaldo said “Cooking something up” while tagging Binance.
The US Justice Department in the past weeks instructed Binance to pay $4.3 billion (£3.4 billion) in penalties and forfeitures. The charges accused Binance of allowing users to bypass global sanctions which made it easy for criminals and terrorists to make huge transactions.
This led to its CEO’s resignation over admitted money laundering violations. Major League Baseball, Formula 1, and Mercedes-Benz are also facing similar class action lawsuits for promoting the failed crypto exchange FTX on the same day.