Football star Cristiano Ronaldo faces a class action lawsuit in the United States related to his endorsement of Binance, the world’s largest cryptocurrency exchange.
Plaintiffs allege that Ronaldo’s promotion led them to make financial losses and are seeking damages exceeding $1 billion.
The lawsuit revolves around Binance’s “CR7” collection of non-fungible tokens (NFTs), announced in November 2022 in partnership with Ronaldo.
NFTs are digital assets used for ownership verification of online content. Ronaldo’s association with the collection aimed to reward his fans for their support over the years.
The footballer, known for his lucrative brand deals, collaborated with Binance on the NFT venture, claiming it would transform the NFT landscape and elevate football.
However, within a year, the cheapest NFT from the collection, initially priced at $77, drastically dropped to approximately $1.
Plaintiffs argue that Ronaldo’s endorsement triggered a substantial increase in searches for Binance, encouraging people to invest in what they consider “unregistered securities,” like Binance’s BNB cryptocurrency.
According to the US Securities and Exchange Commission (SEC), these assets fall under securities, necessitating adherence to US disclosure laws by celebrities endorsing them.
SEC Chair Gary Gensler emphasized the need for celebrities to disclose their compensation for endorsing investment opportunities, including crypto-asset securities.
The claimants accuse Ronaldo of failing to disclose the compensation received for promoting Binance.
Nigel Green, head of consultancy firm DeVere Group, highlighted that attributing blame solely to Ronaldo overlooks the broader issue.
He suggested directing attention to global regulators, emphasizing the necessity for clear guidelines in the evolving financial landscape.
Source-BBC
