Class-action lawsuit alleges footballer’s promotion of world’s largest cryptocurrency exchange was ‘deceptive and unlawful’
Cristiano Ronaldo has been hit with a class-action lawsuit seeking at least $US1bn in damages for his role in promoting cryptocurrency-related “non-fungible tokens,” or NFTs, issued by the beleaguered cryptocurrency exchange Binance.
The lawsuit filed in federal court in the Southern District of Florida on Monday alleges the footballer’s promotion of Binance was “deceptive and unlawful”.
Binance’s partnership with high-profile figures such as Ronaldo, the plaintiffs claim, led them into costly and unsafe investments.
“Evidence now reveals that Binance’s fraud was only able to reach such heights through the offer and sale of unregistered securities, with the willing help and assistance of some of the wealthiest, powerful and recognised organisations and celebrities across the globe – just like defendant Ronaldo,” the suit reads.
Representatives for the Portuguese star, now playing in Saudi Arabia for Al-Nassr, declined to comment on Thursday. Binance, the world’s largest cryptocurrency exchange, did not immediately return requests for comment from the Associated Press.
Ronaldo launched his inaugural NFT “CR7” collection with Binance in November last year, ahead of the 2022 World Cup. The NFTs – which had starting prices ranging from the equivalent of about $US77 to $US10,000 – featured seven animated statues depicting Ronaldo from various moments in his life.
The suit said the promotional efforts of Ronaldo’s Binance partnership were “incredibly successful” – alleging a 500% increase in online searches using the keyword “Binance” after the footballer’s NFTs were announced. The collection’s premium-level NFTs sold out within the first week, the suit claims.
The suit also alleges that Ronaldo should have disclosed how much Binance has paid him for the partnership. The US Securities and Exchange Commission previously noted that federal law requires celebrities to publicly disclose how much they are paid to promote securities, including crypto assets.
NFTs are ordinary digital images with an attached version number that have been added to a cryptocurrency blockchain, a process designed to make them “unique” collectibles. NFTs enjoyed a brief boom, but have since largely collapsed in value as the crypto industry has been marred by scandals and market meltdowns.
Earlier this year Binance was accused of operating as an unregistered securities exchange and violating a slew of US securities laws in a lawsuit from regulators. The crypto exchange agreed last week to pay a roughly $US4bn settlement. Its founder, Changpeng Zhao, stepped down as chief executive and pleaded guilty to a felony related to his failure to prevent money-laundering on the platform.
This week’s lawsuit is not the first time a celebrity has faced litigation over crypto promotions. Last year a host of Hollywood and sports stars, including Larry David and Tom Brady, were named as defendants in a class-action suit against FTX, which was the second-largest crypto exchange before it collapsed in November 2022. The suit argued that the celebrities’ status made them culpable for promoting FTX’s failed business model.
Ronaldo has continued to promote Binance on his official website and social media platforms. Most recently, on X/Twitter he reposted a Binance video and wrote that he was “cooking something up” with the crypto exchange on Tuesday.
AFP
