Cristiano Ronaldo Faces Hefty Lawsuit Over Endorsing Worthless Digital Collectibles
A "$1 billion" class-action lawsuit was filed against Portuguese soccer star Cristiano Ronaldo this week, accusing him of supporting Binance in promoting and selling unregistered securities, including non-fungible tokens (NFTs), causing significant financial losses for investors[1].
Ronaldo, who partnered with Binance in November 2022 to sell unique NFTs representing "iconic Ronaldo moments in the form of digital statues" according to the company's announcement on its social media platforms, has been accused of making false claims and allowing his name and image to be used for misleading advertisements, especially in promoting the sale of unregistered cryptocurrency securities with a tendency for volatile price swings[1][2].
The complaint also alleges that Ronaldo failed to disclose the form or amount of compensation from Binance, as required by U.S. law, and that Binance and Ronaldo knew their ads targeted consumers unfamiliar with cryptocurrencies[2].
SEC Chairman Gary Gensler said in the lawsuit that "prominent figures in the public eye must disclose to the public from whom and how much they are being paid to promote investments in securities"[2]. Last year, the US securities and exchange commission (SEC) found that Kim Kardashian lost over $1 million due to similar token emissions.
"Selling a financial instrument is not the same as selling sneakers," said Charles Whitehead, a professor at Cornell Law School, to CNN[2]. "These prominent figures who promote and sponsor products like this should stop and consult with a securities lawyer."
Binance itself has been under scrutiny lately, agreeing to pay over $4 billion in fines and other penalties last week, with its founder Changpeng Zhao agreeing to step down as CEO and pay a $200 million fine[3]. US authorities say Binance allowed malicious actors to access its platform for transactions related to sexual child abuse, drugs, and terrorist financing[3].
The lawsuit against Ronaldo is ongoing, with the soccer star still promoting Binance and posting an advertisement on his Twitter account with over 110 million followers on November 28[1].
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