Renowned footballer Cristiano Ronaldo is currently entangled in a class action lawsuit in the United States concerning his association with Binance, the world’s largest cryptocurrency exchange.
The plaintiffs contend that Ronaldo’s endorsement misled them into investing, resulting in financial losses and prompting them to seek damages exceeding $1 billion (£790 million).
The BBC has contacted Ronaldo’s management company and Binance for their responses.
Background on Binance’s Collaboration with Ronaldo
In November 2022, Binance unveiled its inaugural “CR7” collection of non-fungible tokens (NFTs) in collaboration with Ronaldo. The footballer expressed that these NFTs would serve as a token of appreciation for the unwavering support of his fans.
NFTs, being digital assets without a physical existence, can be bought and sold, commonly used to signify ownership of online content like images or videos.
The “CR7” branding, derived from Ronaldo’s initials and shirt number, extends across various products, contributing to his status as one of the wealthiest athletes globally.
In a social media announcement, Ronaldo asserted that the partnership aimed to revolutionize the NFT landscape and elevate football to new heights.
The least expensive NFT in the collection was initially priced at $77 during its November 2022 launch but experienced a remarkable surge, reaching around $1 a year later.
Allegations Against Ronaldo and Binance
The complainants assert that Ronaldo’s promotion of Binance resulted in a staggering “500% increase in searches” for the cryptocurrency exchange based in the Cayman Islands.
Moreover, they claim that this promotion led individuals to invest in “unregistered securities,” such as Binance’s BNB cryptocurrency.
According to the US Securities and Exchanges Commission (SEC), these assets fall under the category of securities, necessitating celebrities endorsing them to adhere to US law.
SEC Chair Gary Gensler emphasized the obligation for celebrities to disclose payment details when endorsing investment opportunities.
The claimants argue that Ronaldo failed to disclose his compensation for endorsing Binance.
Nigel Green, CEO of DeVere Group, remarked that the issues at the case’s core extend beyond Ronaldo, urging attention towards global regulators who have been sluggish in establishing clear guidelines for the evolving financial landscape.
Future Plans and Recent Developments
Ronaldo and Binance seem to have intentions for future collaborations, as indicated by a recent social media post from the footballer mentioning that they are “cooking something up.”
Neither Ronaldo nor Binance has responded to the BBC’s inquiries.
The class action lawsuit emerged a week after the US Justice Department instructed Binance to pay $4.3 billion (£3.4 billion) in penalties and forfeitures.
The allegations against Binance include aiding users in bypassing global sanctions and facilitating illicit financial activities, leading to the resignation of CEO Changpeng Zhao due to admitted money-laundering violations.
Major League Baseball, Formula 1, and Mercedes-Benz are concurrently facing class action lawsuits for their involvement in promoting the now-defunct crypto-exchange FTX on the same day.
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