Described: How does football relate to NFTs, and what is the nature of the billion-dollar lawsuit filed against Cristiano Ronaldo? In the partners section of his official website, Cristiano Ronaldo fervently asserts, “I work with brands I believe in”.
Binance, a cryptocurrency exchange platform, is one of the aforementioned brands. His association with this brand, which he clearly supports, has probably resulted in him earning a sizable sum of money from endorsements.
Now, it has damaged his reputation, and the star is facing a $1 billion class action lawsuit on top of the pressure the company is facing from Changpeng Zhao, the chief executive, quitting after admitting guilt to charges of money laundering.
Binance: What Is It?
Binance, one of the biggest exchanges for cryptocurrencies worldwide, trades “securities” in cryptocurrencies, including Non-Fungible Tokens (NFTs), which are digital assets stored on the blockchain that underpins other cryptocurrencies like Bitcoin. The same as with other securities, these NFTs can be bought and sold.
In response to allegations of corruption and money laundering, Binance and the US Department of Justice struck a plea agreement last month that included a $43 billion fine and the resignation of the company’s CEO.
What role does Ronaldo play?
In November 2022, the Portuguese football player announced his partnership with Binance. A year later, the company unveiled a distinct ‘CR7’ collection of NFTs, which have been traded and heavily promoted on Ronaldo’s social media accounts.
However, a group of investors filed a lawsuit against Ronaldo last week in a federal American court, claiming that the forward misled them and exposed them to Binance, resulting in the sale of “unregistered securities.”
The US Securities and Exchange Commission (SEC) declared in June 2023 that cryptocurrency tokens needed to be registered with them just like any other securities. Furthermore, according to the plaintiffs, the tokens traded on Binance, such as the “CR7” NFTs, are unregistered.
The lawsuit primarily centers on the fact that Ronaldo promoted a website where investors could buy “unregistered securities.” The plaintiffs contend that they suffered financial losses as a result of Ronaldo’s actions, not only because his own NFT depreciated to $1 from $77 at launch but also because he endorsed other “unregistered” tokens that are traded on Binance.
What takes place after that?
Now that Ronaldo has had time and space to respond, the case may be resolved out-of-court or proceed to a trial.
The Portuguese forward has a plethora of legal defenses at his disposal, and his attorneys will be informing him of the extent of Binance’s misconduct that he should be held accountable for. However, this raises an intriguing question: to what extent does an endorser bear liability for an investment opportunity?
This has already been tested in American courts due to the sharp decline in the value of cryptocurrencies. Following the collapse of cryptocurrency trading platform FTX, a number of prominent American athletes, such as Naomi Osaka, Steph Curry, and Tom Brady, faced legal action on the same allegations – that they had misled and exposed investors to the company.
Did any other football players endorse NFTs?
Indeed. Many of them.
By the beginning of 2022, major league teams like Manchester United and Liverpool had taken out their own NFT collections during the height of the cryptocurrency frenzy. In the end, Liverpool sold only roughly 6% of the collection, and Manchester United lost 85% of its value.
Rewind to last year’s confrontational, assertive social media promotion of NFTs from the Bored Ape collection by former Chelsea great John Terry.
Former and current chess players, such as Ashley Cole, Tammy Abraham, and Reece James, had all participated in the space, but none of them do so now following the 2022 cryptocurrency crash.
Few people still promote cryptocurrency exchanges and tokens on social media these days. However, the two most well-known football players do.
Lionel Messi has been posting on social media about cryptocurrency trading platforms as recently as last week, but Ronaldo’s relationship with Binance has made headlines because of the lawsuit. On Instagram, Messi and Ronaldo have the most followers combined.
