Cristiano Ronaldo faces $1B lawsuit after promoting NFTs

Portuguese football star Cristiano Ronaldo has been hit with a class-action lawsuit seeking at least $1 billion 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 Monday alleges that Ronaldo’s promotion of Binance was “deceptive and unlawful”. Binance’s partnership with high-profile figures like 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 Ronaldo declined to comment on Thursday. Binance, the world’s largest cryptocurrency exchange, did not immediately return requests for statement from AP.

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 US$77 to US$10,000 — featured seven animated statues depicting Ronaldo from iconic moments in his life, from bicycle-kick goals to his childhood in Portugal.

Monday’s suit says that the promotional efforts of Ronaldo’s Binance partnership were “incredibly successful” — alleging a 500 per cent increase in online searches using the keyword “Binance” after the soccer star’s NFTs was 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’re getting 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.

Over the summer, 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 US$4 billion settlement and its founder Changpeng Zhao stepped down as CEO and pleaded guilty to a felony related to his failure to prevent money laundering on the platform.

This week’s lawsuit against Ronaldo isn’t the first time that a celebrity has faced litigation over crypto promotions. Last year, for example, 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 is one of the most recognisable and wealthiest athletes in the world. He leads his home country Portugal’s national team and has played for the Spanish team Real Madrid, the Italian club Juventus and Manchester United in England. He now plays for the Saudi Arabian professional team Al Nassr.

Ronaldo has continued to promote Binance on his official website and social media platforms. Most recently, on X (the platform formerly known as Twitter) Ronaldo reposted a Binance video and wrote that he was “Cooking something up” with the crypto exchange on Tuesday.

This article was first published on nzherald.co.nz and is republished here with permission