Cristiano Ronaldo, the famous soccer player, is facing a $1 billion class action lawsuit for his association with Binance, the world’s largest cryptocurrency exchange. The lawsuit, filed in a Florida court, alleges that Ronaldo played a significant role in the sale of unregistered securities, specifically non-fungible tokens (NFTs) depicting his iconic moments, resulting in significant financial losses for investors.
Ronaldo partnered with Binance in November 2022 for the sale of unique NFTs, which are digital art turned into verifiable assets on the blockchain. The lawsuit accuses him of making deceptive statements and allowing his name and likeness to be used in connection with Binance’s allegedly deceptive promotions, leading to the sale of unregistered crypto securities prone to volatile market fluctuations.
The plaintiffs also claim that Ronaldo failed to disclose the form or amount of his compensation from Binance, a violation of US law. They point out that Securities and Exchange Commission Chair Gary Gensler emphasized the importance of celebrities disclosing their financial arrangements when promoting investment in securities, citing the SEC’s fine of over $1 million to Kim Kardashian last year for a similar issue.
The class action lawsuit seeks a sum exceeding $1 billion, and despite the legal scrutiny, Ronaldo continues to promote Binance, recently sharing an ad on his X account with 110 million followers on November 28.
This legal action against Ronaldo is similar to lawsuits targeting other celebrities endorsing crypto platforms, such as Tom Brady, Gisele Bundchen, Kim Kardashian, and Floyd Mayweather, Jr. These lawsuits highlight the need for public figures to disclose their involvement with digital financial institutions, emphasizing the distinct implications of endorsing cryptocurrencies compared to traditional products like sports drinks or athletic wear.
Charles Whitehead, a professor at Cornell Law School, warns that celebrities engaging in such sponsorships should seek advice from securities lawyers due to the unique complexities of selling financial instruments like cryptocurrency assets.