Due to Binance advertising, Cristiano Ronaldo is facing a $1 billion lawsuit
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| Due to Binance advertising, Cristiano Ronaldo is facing a $1 billion lawsuit |
Due to his endorsement of Binance, the biggest cryptocurrency exchange in the world, football player Cristiano Ronaldo is being sued as part of a class action in the United States.
The complainant alleges that he invested at a loss because of his recommendation.
Damages "in excess of $1 billion (£790 million)" are what they are seeking.
For a response, the BBC has reached out to Binance and Ronaldo's management organization.
The football player said that the first "CR7" collection of non-fungible tokens (NFTs) from Binance and Ronaldo will thank supporters "for all the years of support." The announcement was made in November 2022.
NFTs are digital assets that are solely present in the digital realm and may be purchased and sold. They do not possess a physical form. These are usually used to indicate who owns something, such an image or video uploaded to the internet.
Being able to trademark everything from shoes to perfumes with his initials and jersey number "CR7" has made Ronaldo one of the richest sportsmen on the planet.
In a social media video announcing the cooperation, Ronaldo said to potential investors, "We are going to change the NFT game and take football to the next level."
When the collection's least expensive NFT went on sale in November 2022, it was listed at $77; however, within a year, its value had dropped to around $1.
According to the plaintiffs, Binance saw a "500% increase in searches" after Ronaldo promoted the cryptocurrency exchange, which is based in the Cayman Islands.
They claim that it also encouraged customers to utilize the company to invest in "unregistered securities," like the cryptocurrency BNB offered by Binance.
The US Securities and Exchange Commission (SEC) states that these assets can be regarded as securities, therefore celebrities who support them have to abide by US law.
It was earlier said by SEC Chairman Gary Gensler that celebrities would have to "disclose to the public who as well as how much you are being paid for encouraging investments in securities".
In addition, he said, "Investors should exercise caution to determine whether an investment is appropriate for them and should be aware of the motivations behind the celebrities' endorsements of investment prospects, including crypto-asset securities."
The claims contend that Ronaldo had a duty to reveal his salary but chose not to do so.
The issues at the heart of the case, according to Nigel Green, CEO of consulting company Deavere Group, go well beyond the issues with a single football player.
"It is important to understand whether blaming Ronaldo alone simplify a complex issue," he said.
"Global regulators, on the other hand, should also receive more attention as they have been sluggish to set forth precise guidelines for this developing financial landscape."
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Ronaldo's latest social media post indicating they are "cooking something" suggests that he and Binance have plans to collaborate once again in the future.
The BBC has asked for comments, but no one has replied.
A week after the US Justice Department demanded that the company pay $4.3 billion (£3.4 billion) in penalties and forfeitures, a class action lawsuit was launched.
It charged Binance with facilitating money transfers for terrorists and criminals and aiding users in dodging international sanctions.
Changpeng Zhao, the company's CEO, left the position after acknowledging that he had violated laws against money laundering.
Class action lawsuits against the advertising of the defunct cryptocurrency exchange FTX were filed on the same day against Mercedes-Benz, Major League Baseball, and Formula 1.
