Five-time Ballon d’Or winner Cristiano Ronaldo is being sued for $1 billion over his affiliation with Binance.
The former Manchester United player and current Al-Nassr soccer star released a range of non-fungible tokens (NFTs) in November 2022 in collaboration with Binance. At the time, the cheapest NFT in the CR7 collection was worth $77. However, its value has since fallen to around $1 in 12 months.
Details of the Lawsuit
In the lawsuit, fueled at the US District Court, Southern District of Florida, Miami, the claimants allege that Ronaldo’s promotional campaign caused them over $1 billion in damages. The plaintiffs claim that Ronaldo was directly involved in promoting and selling unregistered securities in collaboration with Binance.
Their lawsuit claims that the promotion led to a 500% rise in searches for Binance following their release of the CR7 NFT collection. In a promotional video for the collection, Ronaldo told viewers they would “change the NFT game and take football to the next level.”
The plaintiffs allege Cristiano Ronaldo knew or should have known Binance was selling unregistered securities, given the substantial resources and his ability to obtain financial advisors.
SEC Warning to Celebrities
In the past, the SEC chair Gary Gensler warned celebrities. He told them to disclose how much they were getting paid to promote securities. Gensler also warned investors to research why celebrities were promoting such securities. The plaintiffs cite the guidance and claim that Ronaldo failed to disclose how much he was being paid.
Cristiano Ronaldo Still Working With Binance
As recently as Tuesday, November 28, 2023, Ronaldo worked with Binance. He posted to his social Twitter account that they were “cooking something up” with the exchange.
Recent Binance Lawsuit
The class action suit comes a week after Binance settled a lawsuit filed by the SEC, in which they paid $4.3 billion. The DoJ had accused Binance of helping sanctioned countries bypass restrictions. Consequently, terrorists and criminals were able to launder money via the exchange.
Following the lawsuit’s conclusion, its CEO, Changepeng Zhao, stepped down after admitting to violating US money laundering rules. The SEC is also reportedly actively investigating Binance for the mishandling of customer funds.
What This Means for the Future
According to Nigel Green, a financial consultant, the Cristiano Ronaldo lawsuit oversimplifies a complex issue. He said it highlights the slow pace at which regulators have adopted cohesive rules for selling crypto-based securities. The publicity generated by the lawsuit could lead to more stringent measures for celebrity endorsement of investment vehicles. It could also force sports teams and stars to avoid crypto investment promotions in the future.
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