Cristiano Ronaldo currently facing a lawsuit in the United States regarding his endorsement of Binance, the world’s largest cryptocurrency exchange.
The plaintiffs argue that Ronaldo’s promotion of Binance resulted in their making unprofitable investments, and they are now seeking damages exceeding $1 billion (£790 million). The BBC, in its report of the story, indicated that it has reached out to both Ronaldo’s management company and Binance for their comments on the matter.
In November 2022, Binance introduced its inaugural collection of non-fungible tokens (NFTs) called “CR7” in collaboration with Ronaldo. The footballer expressed that these NFTs would serve as a reward for his loyal fans throughout the years.
NFTs are digital assets that can be bought and sold, lacking any physical existence. They are commonly utilized to establish ownership of various online media, such as images or videos. The term “CR7” represents Ronaldo’s initials and jersey number, and it is utilized as a branding element across a range of products, including footwear and fragrances, contributing to his status as one of the wealthiest athletes globally.
In a social media video announcing the partnership, Ronaldo told would-be investors “we are going to change the NFT game and take football to the next level”. In November 2022, the collection’s most affordable NFT had a price tag of $77. However, after a year, its value plummeted to approximately $1.
The claimants argue that Ronaldo’s endorsement of Binance resulted in a significant surge of “500% increase in searches” for the crypto exchange, which is based in the Cayman Islands. Furthermore, they assert that this promotion encouraged individuals to invest in what they refer to as “unregistered securities,” including Binance’s BNB cryptocurrency. The US Securities and Exchanges Commission (SEC) considers these assets as securities, thus necessitating celebrities to comply with US law when endorsing them.
SEC chair Gary Gensler previously said celebrities must “disclose to the public from whom and how much you are getting paid to promote investment in securities”.
“When celebrities endorse investment opportunities, including crypto-asset securities, investors should be careful to research if the investments are right for them, and they should know why celebrities are making those endorsements,” he said.
The claimants allege Ronaldo should have disclosed how much he was being paid, but did not. Nigel Green, boss of consultancy firm DeVere Group, said the problems at the heart of the case went wider than just one footballer.
“It is crucial to recognise that blaming Ronaldo alone oversimplifies a complex issue,” he said.
“Instead, attention should also be directed towards global regulators who have been slow to establish clear guidelines for this evolving financial landscape.”
