Cristiano Ronaldo embroiled in billion-dollar class-action lawsuit over endorsement of worthless NFTs
Cristiano Ronaldo sued for endorsing Binance: Soccer star faces $1 billion class-action lawsuit over promotion of crypto exchange
Cristiano Ronaldo, the famous soccer player, is being sued for $1 billion in a class action lawsuit related to his endorsement of Binance, the largest cryptocurrency exchange in the world. The lawsuit, filed in a Florida court on Tuesday, alleges that Ronaldo played a role in promoting and selling unregistered securities in collaboration with Binance, resulting in significant financial harm to investors, including the sale of non-fungible tokens (NFTs) featuring him.
Binance did not respond immediately to CNN's request for comment and a representative for Ronaldo declined to comment.
During its widely publicized launch in November 2022, Ronaldo partnered with Binance to sell exclusive NFTs featuring "an iconic Ronaldo moment immortalized in the form of a digital statue," as announced by the company on his social media platforms.
NFTs have become a popular crypto trend, allowing digital art and collectibles to be transformed into unique, verifiable assets that can be easily traded on the blockchain. The lawsuit alleges that Ronaldo made false statements and allowed his name and image to be used in promoting Binances unregistered crypto products, which are known for their extreme volatility.
The plaintiffs also claim that Ronaldo failed to disclose the form and amount of his compensation from Binance, as required by US law. They also allege that Binance and Ronaldo were aware that these advertisements targeted consumers unfamiliar with crypto.
According to the lawsuit, Securities and Exchange Commission Chair Gary Gensler stated that celebrities must disclose their compensation for promoting investment in securities. The lawsuit also mentioned that the SEC fined Kim Kardashian over $1 million last year for a similar issue.
Celebrities sued
The lawsuit filed as a class action is seeking damages in excess of $1 billion. Interestingly, Ronaldo continues to endorse the company, even sharing a Binance advertisement on his X account as recently as November 28, reaching his 110 million followers.
Other celebrities have also faced similar lawsuits, as seen with Tom Brady, Gisele Bundchen, and others who were targeted last year by an FTX investor for their endorsement of the now-defunct crypto platform. The lawsuits claim that these public figures failed to adequately disclose their own involvement with digital financial institutions. Brady, Bundchen, and the other defendants have refuted the allegations in the complaint and have sought to have the case dismissed.
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Last year, celebrities Kardashian and Floyd Mayweather, Jr. were involved in a crypto lawsuit. The lawsuit alleged that EthereumMax executives collaborated with celebrity promoters to persuade investors to purchase the EMax token, leading to a rise in its price and allowing them to profit from selling their own tokens. However, the lawsuit was dismissed by a federal judge who stated that it was unclear if the investors who filed the lawsuit were actually influenced by the promotions. According to Charles Whitehead, a professor at Cornell Law School, promoting cryptocurrency has different implications compared to endorsing products like sports drinks or athletic wear.
Binance problems
"Selling a financial instrument as an asset is entirely different from selling sneakers," Whitehead emphasized. "Celebrities engaging in sponsorships should seriously consider consulting a securities lawyer."
Binance has recently been at the center of attention for agreeing to pay over $4 billion in fines and penalties. In addition, founder Changpeng Zhao has agreed to step down as CEO and pay $200 million in fines. This comes after a multiyear investigation by US authorities revealed that Binance allowed illicit transactions linked to child sex abuse, narcotics, and terrorist financing on its platform.
KRAKOW, POLAND - September 12, 2023: A smartphone displaying the Binance logo against a background of programming code in this photo illustration. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
Omar Marques/SOPA Images/LightRocket/Getty Images
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Zhao could be sentenced to a maximum of 10 years in prison, but it is expected that his actual sentence will be much lower. Additionally, he has agreed to pay a $50 million criminal fine and a $150 million civil penalty.
"I have made mistakes and I need to take responsibility," Zhao stated on X. "This is in the best interest of our community, Binance, and myself. Binance is no longer in its infancy. It is time for me to let it grow and thrive."
US officials described this as the biggest-ever corporate resolution that includes criminal charges for an executive.
- CNNs Jennifer Korn and Allison Morrow contributed to this report.
