Cristiano Ronaldo, a renowned football star, is currently embroiled in a major lawsuit in the United States due to his involvement in promoting Binance, the world’s leading cryptocurrency exchange. The lawsuit arises from claims by numerous plaintiffs who allege that Ronaldo’s endorsement led them to make investments that resulted in significant losses. These plaintiffs are collectively seeking damages exceeding $1 billion.
In November 2022, Binance unveiled its “CR7” collection of non-fungible tokens (NFTs) in collaboration with Ronaldo. These digital assets, which have no tangible form, are primarily used to denote ownership of online media like images or videos. The “CR7” label, reflecting Ronaldo’s initials and jersey number, is a key part of his branding across various product ranges.
Ronaldo, in a promotional video, encouraged potential investors to engage with these NFTs, claiming an innovative approach to combining football and NFTs. The initial price of the cheapest NFT was set at $77 but plummeted to about $1 within a year.
The lawsuit emphasizes that Ronaldo’s promotion significantly boosted searches for Binance by 500%. The plaintiffs argue that this led to investments in what they refer to as “unregistered securities,” including Binance’s BNB cryptocurrency. According to the US Securities and Exchanges Commission (SEC), such assets can be classified as securities, requiring celebrities who endorse them to comply with US regulations, including disclosing payment details for their endorsements.
The SEC has previously stated that celebrity endorsements should be approached with caution by investors and require full disclosure of compensation details. The plaintiffs claim Ronaldo failed to disclose his compensation for the Binance promotion.
Nigel Green, CEO of DeVere Group, points out that the issue is more complex than solely focusing on Ronaldo’s role. He suggests that global regulators also bear responsibility for not providing clear guidelines in the rapidly evolving financial sector.
