Cristiano Ronaldo, one of many high profile players to recently become Al-Nassr stars, is facing a class-action lawsuit filed against him for his promotion of Binance Non-Fungible Tokens (NFTs).
The claimants allege that they suffered financial losses due to Ronaldo's endorsement of these digital assets.
Former Manchester United striker Ronaldo entered into a partnership with Binance, the world's largest cryptocurrency exchange, to create and promote yearly NFT projects.
The aim was to integrate Web3 into sports and provide fans an opportunity to buy and engage in these unique digital assets.
Ronaldo alleged to have used his fame to influence consumers
However, this collaboration has led to legal complications. Complaints were filed in a district court in Florida claiming that Ronaldo "promoted, assisted in, or actively participated in the offer and sale of unregistered securities" alongside Binance.
The lawsuit also highlights the significant influence of Ronaldo's popularity on consumer behaviour. It alleges that his promotion led to a 500% increase in searches for Binance and was "incredibly successful" at attracting new users to the crypto exchange platform.
Claimants argue that consumers drawn by Ronaldo’s promotion were more likely driven towards other services offered by Binance such as trading and staking cryptocurrencies rather than just purchasing NFTs.
This lawsuit comes amidst recent regulatory issues faced by Binance. The cryptocurrency giant agreed on a record $4.3 billion settlement fee with the US Department of Justice following allegations of non-compliance with regulations.
Additionally, Changpeng Zhao - Founder & CEO - agreed to step down from his role as part of this settlement agreement.
Celebrities encouraged to be wary of the brands they promote
The US Securities and Exchange Commission (SEC) has been cautioning celebrities over promoting crypto assets deemed as unregistered securities which violate its guidelines over the past year.
Ronaldo, who has opened the door for many footballers to become high-profile Saudi Pro League players, has also been accused of promoting "unregistered crypto securities". The lawsuit suggests that Ronaldo should have been aware of Binance's alleged regulatory breaches given his past experience in the trading market.
The three claimants - Gordon Lewis, Michael Sizemore and Mikey Vongdara - are seeking damages and compensation for their losses.
This case underscores the potential risks associated with celebrity endorsements in the volatile world of cryptocurrencies. It serves as a reminder to sports fans to exercise caution when investing in digital assets promoted by their favourite stars.
