Cristiano Ronaldo NFT Endorsement Backfires: Is He Facing a $1 Billion Lawsuit?

Cristiano Ronaldo NFT Endorsement Backfires: Is He Facing a $1 Billion Lawsuit?

Soccer sensation Cristiano Ronaldo finds himself in the midst of a significant legal challenge, as a $1 billion class action lawsuit has been filed against him for his association with Binance, the world’s largest cryptocurrency exchange.

The lawsuit, lodged in a Florida court on Tuesday, alleges that Ronaldo played a role in the promotion and sale of unregistered securities in collaboration with Binance. This includes the sale of non-fungible tokens (NFTs) featuring Ronaldo, ultimately resulting in substantial financial losses for investors.

Despite CNN’s request for comment, neither Ronaldo nor Binance has responded promptly.

In November 2022, Ronaldo joined forces with Binance to offer exclusive NFTs showcasing “an iconic Ronaldo moment immortalized in the form of a digital statute.” The launch garnered significant attention, including on Ronaldo’s social media platforms.

NFTs, a mainstream crypto-related trend, transform digital art and collectibles into unique, verifiable assets easily tradable on the blockchain.

The lawsuit accuses Ronaldo of making “deceptive statements” and allowing his name and likeness to be associated with Binance’s deceptive promotions, particularly the sale of unregistered crypto securities prone to unpredictable volatility.

Cristiano Ronaldo NFT Endorsement Backfires

Plaintiffs also contend that Ronaldo failed to disclose the form or amount of compensation received from Binance, a requirement under US law. They allege that Binance and Ronaldo were aware that their advertisements targeted consumers unfamiliar with crypto.

Referring to Securities and Exchange Commission Chair Gary Gensler’s stance on celebrity endorsements, the lawsuit notes that celebrities must disclose payment details when promoting investment in securities. Kim Kardashian faced a similar issue, resulting in a fine of over $1 million from the SEC last year.

The class action lawsuit seeks a sum exceeding $1 billion. Notably, despite the legal challenge, Ronaldo continues to promote the company, recently sharing a Binance ad on his X account with 110 million followers as of November 28.

Other Celebrities Sued

Several celebrities, including Tom Brady and Gisele Bundchen, faced lawsuits last year for endorsing the now-defunct crypto platform FTX. An investor alleged that these public figures failed to disclose their involvement with digital financial institutions. Brady, Bundchen, and other defendants denied the claims and sought dismissal of the case.

Similarly, Kardashian and Floyd Mayweather, Jr., encountered a crypto lawsuit early last year. The lawsuit asserted that EthereumMax executives collaborated with celebrity promoters to attract investors to buy the EMax token, manipulating its price for their benefit. However, the case was dismissed by a federal judge who found it unclear whether the suing investors had seen the promotions.

Promoting cryptocurrencies involves different considerations than traditional endorsements like sports drinks or athletic wear, as noted by Charles Whitehead, a professor at Cornell Law School. He emphasized the importance for celebrities engaging in such sponsorships to consult with securities lawyers, highlighting the distinction between selling financial instruments and consumer products.

Binance Problems

Binance, the world’s largest cryptocurrency exchange, has faced significant issues. Recently, the company agreed to pay over $4 billion in fines and other penalties. Its founder, Changpeng Zhao, decided to step down as CEO and pay $200 million in fines. Following a lengthy investigation, US authorities revealed that Binance allowed illicit activities on its platform, facilitating transactions related to child abuse, narcotics, and terrorist financing. Zhao faces a maximum of 10 years in prison, although the actual sentence is expected to be lower. He also agreed to pay a $50 million criminal fine and a $150 million civil penalty, marking the largest-ever corporate resolution with criminal charges for an executive, according to US officials. Zhao acknowledged his mistakes and expressed responsibility for the benefit of the community, Binance, and himself, stating that it’s time for the platform to progress independently.

Cristiano Ronaldo NFT Endorsement Backfires
About Author

John Smith

John Smith is a distinguished journalist, holding a Master's in Journalism from the renowned Columbia University. With a knack for uncovering the most captivating stories, John is the go-to expert for all things related to politics and current affairs. His insightful analysis and commitment to unbiased reporting set him apart in the world of journalism. John's writing ensures you're always in the know about the latest happenings in the USA.

Leave a Reply

Your email address will not be published. Required fields are marked *