Cristiano Ronaldo Faces $1 Billion Lawsuit Over Binance Endorsement
Cristiano Ronaldo Faces $1 Billion Lawsuit Over Binance Endorsement
Football star Cristiano Ronaldo is at the center of a class-action lawsuit in the US related to his promotion of Binance, the world’s largest cryptocurrency exchange. The plaintiffs allege that Ronaldo’s endorsement prompted them to make investments resulting in losses, seeking damages exceeding $1 billion (£790 million). Binance collaborated with Ronaldo on its “CR7” collection of non-fungible tokens (NFTs) in November 2022. NFTs, virtual assets with no physical form, can be bought and sold, often representing ownership of digital content. The claimants argue that Ronaldo’s promotion led to a “500% increase in searches” for Binance, encouraging people to invest in what they term “unregistered securities.”
Binance’s NFT Collection and Ronaldo’s Involvement
In November 2022, Binance launched its “CR7” NFT collection in collaboration with Ronaldo. The footballer expressed excitement about changing the NFT game and taking football to the next level. The collection, referencing Ronaldo’s initials and shirt number, featured various digital items for sale. However, the lawsuit highlights a significant drop in the value of the NFTs over the year, with the cheapest item dropping from $77 to approximately $1.
Allegations and SEC Guidelines
The claimants argue that Ronaldo’s promotion led people to invest in Binance’s BNB cryptocurrency, considered “unregistered securities” by the US Securities and Exchange Commission (SEC). The SEC considers such assets as securities, requiring adherence to US laws by celebrities endorsing them. SEC Chair Gary Gensler emphasizes the need for celebrities to disclose payment details when endorsing investment opportunities, including crypto-asset securities. The lawsuit alleges that Ronaldo failed to disclose his compensation for promoting Binance.
Broader Implications and Regulatory Concerns
Nigel Green, CEO of DeVere Group, emphasizes that the issues extend beyond Ronaldo, urging attention to global regulators who have been slow to establish clear guidelines for the evolving financial landscape. The case coincides with broader legal actions, including the US Justice Department’s directive for Binance to pay $4.3 billion in penalties and forfeitures. Binance faces allegations of aiding users in circumventing global sanctions and facilitating illicit money movement. Ronaldo and Binance, yet to respond to the lawsuit, hint at future collaborations in recent social media posts.
Conclusion: A Complex Issue Unfolding
As Ronaldo faces this substantial lawsuit, the complexities of celebrity endorsements in the cryptocurrency space come to the forefront. The case raises questions not only about individual responsibilities but also about the regulatory framework surrounding such endorsements. Ronaldo’s involvement with Binance may mark a turning point in how celebrities engage with and promote cryptocurrency platforms, prompting increased scrutiny and potential regulatory adjustments.
