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Renowned footballer Cristiano Ronaldo is entangled in a class-action lawsuit filed in the US regarding his endorsement of Binance, the world’s largest cryptocurrency exchange. Plaintiffs allege that Ronaldo’s promotion of Binance resulted in their making investment losses and are now seeking damages exceeding $1 billion.
The lawsuit centers on Ronaldo’s endorsement of Binance, which was linked to the promotion of Binance’s “CR7” collection of non-fungible tokens (NFTs) in November 2022. The footballer’s association with Binance aimed to reward fans for their support over the years.
NFTs, virtual assets lacking tangible form but traded digitally, became the focus of this partnership. Ronaldo’s endorsement involved a social media announcement promising to revolutionize the NFT game and elevate football’s engagement in this space.
However, the plaintiffs claim that Ronaldo’s endorsement led to a 500% surge in searches for Binance and prompted individuals to invest in what they describe as “unregistered securities” offered by Binance, such as the Binance Coin (BNB) cryptocurrency.
The lawsuit asserts that these unregistered securities, as per the US Securities and Exchange Commission (SEC), require disclosures when endorsed by celebrities. SEC Chair Gary Gensler emphasized the need for celebrities to divulge payment details for endorsing securities and urged investors to scrutinize endorsements carefully.
The claimants argue that Ronaldo failed to disclose the compensation he received for endorsing Binance, a critical requirement under US law.
Nigel Green of DeVere Group highlighted the lawsuit as indicative of broader issues within the evolving financial landscape, urging attention towards global regulators for clearer guidelines.
Ronaldo and Binance seemingly have future collaborative plans, as indicated by Ronaldo’s recent social media post hinting at ongoing endeavors. However, neither party has responded to the BBC’s requests for comment on the lawsuit.
The class action lawsuit against Binance arrives amidst mounting legal challenges faced by other entities such as Major League Baseball, Formula 1, and Mercedes-Benz, involving their endorsement of the failed crypto-exchange FTX. This legal action followed the US Justice Department’s directive to Binance to pay significant penalties and forfeitures for alleged violations, including aiding users in evading global sanctions and facilitating illicit money movements. Binance’s CEO’s resignation and admission of money-laundering violations further escalated the situation.
