In a shocking development that underscores the growing scrutiny of celebrity endorsements in the cryptocurrency space, soccer icon Cristiano Ronaldo is facing a class action lawsuit amounting to $1 billion. The lawsuit, initiated by disgruntled customers of Binance, accuses the soccer legend of promoting the controversial cryptocurrency exchange that recently settled for $4 billion with the federal government for violating the Bank Secrecy Act.
Key Facts of the Lawsuit
Ronaldo, who boasts a staggering 849 million followers on social media, began his partnership with Binance in 2022, leveraging his global brand to create NFT collections and social media posts. Plaintiffs allege that the star “participated in and aided” the sale of unregistered securities through his promotional activities with Binance. They claim that, given Ronaldo’s investment experience and access to external advisors, he should have recognized the potential legal issues surrounding Binance’s operations.
The lawsuit specifically cites Ronaldo’s “social media promotions, NFT collection, and other advertorial activities” as contributing factors to Binance’s alleged misconduct. Despite the lawsuit, Ronaldo appears to maintain a working relationship with the exchange, teasing his followers with a recent tweet about “cooking something up with @binance.”
Background on Binance’s Legal Troubles
Binance, the world’s largest cryptocurrency exchange, found itself in hot water after settling with federal authorities on November 21. The company was forced to pay over $4 billion in penalties and restitution for engaging in illegal activities, including selling unregistered securities. In a pointed statement, Attorney General Merrick Garland emphasized, “Using new technology to break the law does not make you a disruptor; it makes you a criminal.” Following the settlement, Binance’s founder, Changpeng Zhao, was compelled to resign as CEO and pay a personal fine of $53 million.
The plaintiffs in Ronaldo’s lawsuit argue that his high-profile endorsements played a crucial role in Binance’s alleged fraudulent practices, stating, “Binance’s partnership with celebrities like Ronaldo was clearly designed to use the positive reputation associated with specific celebrities to convince consumers that Binance was a safe place to buy and sell cryptocurrency.”
A Trend of Celebrity Legal Issues in Crypto
Ronaldo is not the first celebrity to encounter legal challenges due to cryptocurrency endorsements. In October 2022, Kim Kardashian was fined $1.26 million by the SEC for failing to disclose her payment for promoting EthereumMax, a token that has since drawn criticism for being linked to a pump and dump scheme. Additionally, in March 2023, several notable figures, including Tom Brady and Larry David, faced lawsuits for promoting the now-defunct FTX exchange, founded by convicted fraudster Sam Bankman-Fried.
Implications for Celebrity Endorsements
The mounting legal troubles surrounding high-profile endorsements in the cryptocurrency industry underscore the need for clarity and compliance regarding disclosure requirements. As regulators increase scrutiny, celebrities must navigate the complex landscape of advertising standards, particularly in an area as volatile and unregulated as cryptocurrency.
In light of these developments, public figures considering endorsements in the crypto space should take note of the potential repercussions. Failing to disclose financial compensation for promotional activities could lead to severe legal consequences, as evidenced by the ongoing actions against Ronaldo and his peers.
Conclusion
As the legal landscape surrounding cryptocurrency continues to evolve, the spotlight on celebrity endorsements will only grow brighter. With Ronaldo now entangled in a significant lawsuit, the media and the public will be watching closely. This case serves as a cautionary tale for celebrities and influencers alike, reminding them of the importance of transparency and due diligence when promoting financial products and services to their followers.