Cristiano Ronaldo faces $1 billion lawsuit for hyping Binance
Cristiano Ronaldo’s partnership with Binance isn’t quite the easy win he’d hoped for.
The Portuguese football star partnered with the crypto exchange in November 2022 and released “CR7” non-fungible tokens (NFTs), which he claimed were “going to change the game and take football to the next level.” Now, he’s facing legal action for promoting the teetering brand.
The captain of Al-Nassr was been hit by a class-action lawsuit asking for a “sum exceeding” $1 billion in the US, the BBC first reported yesterday (Nov. 29). The lawsuit was filed in a Florida court on Nov. 27, five days after now-embattled Binance agreed to pay regulators a hefty fine and the resignation of its CEO.
The plaintiffs in the case are investors that claim Ronaldo’s promotion of the largest cryptocurrency exchange in the world led them to make loss-making investments.
The Ronaldo lawsuit isn’t a surprise. When FTX, the crypto exchange led by Sam Bankman-Fried, imploded, several celebrity endorsers got caught in the legal net. From NFL quarterback Tom Brady and his ex-wife supermodel Gisele Bündchen to comedian Larry David to tennis star Naomi Osaka, nearly a dozen celebrities were named in a class-action lawsuit for endorsing FTX.
But will he really have to cough up the billion dollars? If past is precedent, then no. (More on that below.)
Ronaldo and Binance, by the digits
500%: The “increase in searches” for the cryptocurrency exchange because of Ronaldo’s promotion, as per the lawsuit
850 million: Ronaldo’s cumulative social media following across platforms
CR7: A moniker used for Ronaldo, combining his initials and favorite number, that is used as branding in a range of products, from footwear to fragrances, and now NFT
$200 million: Ronaldo’s yearly earnings according to reports about his contract with Al-Nassr
$4.3 billion: Settlement Binance agreed to with the US Treasury Department over alleged violations of anti-money laundering (AML) and sanctions laws just a week back. Subsequently, the company’s founder and star CEO Changpeng “CZ” Chao resigned.
The criteria for celebrities endorsing crypto
“The celebrity is subject to liability for his statement about the product. The advertiser is also liable for misrepresentations made through the endorsement,” the Federal Trade Commission, which is in charge of protecting consumers from deceptive ads, says in its guidance.
The expectation is that every celebrity be more like Taylor Swift. The most bankable music sensation at the moment, the Midnights artist decided against working with FTX because it couldn’t answer her question: “Can you tell me that these are not unregistered securities?”
People of interest: EMAX’s celebrity endorsers, including Kim Kardashian
In December 2022, a federal judge in California threw out a lawsuit from investors accusing famous figures, including reality TV star Kim Kardashian and boxer Floyd Mayweather Jr., of endorsing the cryptocurrency EthereumMax (EMAX). The judge ruled that investors should “act reasonably before basing their bets on the zeitgeist of the moment.”
The brand’s faces didn’t escape unscathed. Just months prior, in October 2022, Kardashian and the other celebrities agreed to pay millions in fines to the SEC for failing to disclose the remuneration they earned for endorsing EMAX.
Quotable: Everyone should do their due diligence about crypto
“Consumers and investors should always do their research and approach advertising with a skeptical eye. As you saw in the recent dismissal of the EthereumMax class action, it can be challenging to bring these cases under US law. At the same time, that doesn’t let celebrities off the hook. Just as investors need to be skeptical and do their research, celebrities should do their due diligence as well.”
—Kathy Kraninger, former Director of the Consumer Financial Protection Bureau (CFPB) and now Vice President of Regulatory Affairs for Solidus Labs, to Forbes
