Cristiano Ronaldo sued for $1 billion over Binance ads
Ronaldo and Binance hint at future collaboration amidst ongoing lawsuit
Ronaldo sued for $1 billion over Binance ads
Footballer Cristiano Ronaldo is currently embroiled in a class action lawsuit in the United States, alleging that his endorsement of Binance, the world’s largest cryptocurrency exchange, resulted in financial losses for investors. The plaintiffs are pursuing damages exceeding $1 billion (£790 million).
Binance introduced its inaugural “CR7” collection of non-fungible tokens (NFTs) in collaboration with Ronaldo in November 2022. These digital assets, lacking a physical presence, can be bought and sold, typically representing ownership of online content like images or videos.
The term “CR7” derives from Ronaldo’s initials and shirt number, serving as a branding element across various products, contributing to his status as one of the world’s wealthiest athletes. Ronaldo, in a social media video announcing the partnership, assured potential investors of transformative changes in the NFT landscape and vowed to elevate football to new heights. The BBC has reached out to both Ronaldo’s management company and Binance for their responses.
The most affordable NFT in the collection initially sold for $77 in November 2022, but its value plummeted to approximately $1 a year later. Allegations from the claimants suggest that Cristiano Ronaldo’s promotion of Binance triggered a “500% increase in searches” for the Cayman Islands-registered crypto exchange.
The claimants contend that Ronaldo’s endorsement led individuals to invest in what they describe as “unregistered securities,” specifically Binance’s BNB cryptocurrency. The U.S. Securities and Exchange Commission (SEC) classifies these assets as securities, requiring celebrities endorsing them to adhere to U.S. law. SEC Chair Gary Gensler emphasized the importance of celebrities disclosing payment details when endorsing investment opportunities, including crypto asset securities.
According to the claimants, Ronaldo failed to disclose the amount he was compensated for the endorsement. Nigel Green, the CEO of consultancy firm DeVere Group, asserted that the issues at the core of the case extend beyond one footballer, emphasizing the need for global regulators to establish clear guidelines in this evolving financial landscape.
Future plans
Ronaldo and Binance seem to be contemplating future collaborations, as hinted in a recent social media post by the footballer where he mentioned they are “cooking something up.” Despite the ongoing class action lawsuit, neither Ronaldo nor Binance has responded to the BBC’s requests for comment.
This development comes on the heels of the U.S. Justice Department instructing Binance to pay $4.3 billion (£3.4 billion) in penalties and forfeitures. The department’s accusations against Binance include aiding users in circumventing global sanctions and facilitating the movement of money for criminals and terrorists. In response, Binance’s CEO, Changpeng Zhao, resigned from his position after admitting to money laundering violations.
It’s noteworthy that on the same day, other entities, including Major League Baseball, Formula 1, and Mercedes-Benz, are also facing class action lawsuits related to their promotion of the unsuccessful crypto exchange FTX.