A class action lawsuit has been filed against Cristiano Ronaldo in the United States because of his endorsement of Binance, the biggest cryptocurrency exchange in the world.
The plaintiffs claim that their decision to make riskier investments was influenced by his backing.
In damages, they are requesting “a sum exceeding” $1 billion (£790 million).
For comments, the BBC has gotten in touch with Binance and Ronaldo’s management business.
The football player claimed that the first “CR7” collection of non-fungible tokens (NFTs) from Binance and Ronaldo would thank supporters “for all the years of support” in November 2022.
NFTs are digital assets that are solely present in the digital realm and may be purchased and sold. They do not possess a physical form. They are typically used to indicate who owns anything, like an image or video that is posted online.
Ronaldo’s jersey number and initials, “CR7,” are employed as branding in a variety of products, such as fragrances and shoes, and have contributed to his status as one of the richest athletes on the planet.
Ronaldo promised potential investors that “we are going to change the NFT game and take football to the next level” in a social media video announcing the alliance.
When the collection’s least expensive NFT went on sale in November 2022, it was listed for $77; however, within a year, its price had dropped to roughly $1.
According to the plaintiffs, Binance saw a “500% increase in searches” after Ronaldo promoted the cryptocurrency exchange, which is based in the Cayman Islands.
Additionally, they claim that it encouraged customers to use the company to invest in “unregistered securities,” such as the cryptocurrency BNB offered by Binance.
Celebrities endorsing these assets must abide by US law because the US Securities and Exchanges Commission (SEC) considers them to be securities.
Celebrities need to “disclose to the public from whom and how much you are getting paid to promote investment in securities,” according to former SEC chief Gary Gensler.
“Investors should exercise caution to determine whether investment opportunities, including crypto-asset securities, are appropriate for them, and they should be aware of the motivations behind celebrities endorsing such investments,” the speaker stated.
The claims contend that Ronaldo had a duty to reveal his salary but chose not to do so.
According to Nigel Green, the head of consulting firm DeVere Group, there were more issues at stake in this case than just one football player.
“Recognising that blaming Ronaldo alone oversimplifies a complex issue is crucial,” he stated.
Rather, focus ought to be on international regulators as well, as they have been sluggish to set forth precise rules for this changing financial environment.
Ronaldo recently posted on social media that he and Binance are “cooking something up,” suggesting that they have plans to collaborate once more in the future.
Both have not reacted when contacted for comment.
