(Football News) On his official website, in the partners section, Cristiano Ronaldo confidently asserts, “I collaborate with brands that I have faith in.”
One such brand is the cryptocurrency exchange platform Binance, and his association with this brand, in which he evidently places his trust, has likely resulted in substantial earnings from endorsements. However, this connection now carries a blow to his reputation as the company faces turmoil. The chief executive, Changpeng Zhao, resigned after admitting guilt to money laundering charges, and simultaneously, the soccer star is confronted with a $1 billion class action lawsuit.
What is Binance?
Binance stands among the largest cryptocurrency exchange platforms globally, engaging in the trading of crypto “securities,” including Non-Fungible Tokens (NFTs). NFTs are digital assets recorded on blockchain technology, similar to the technology supporting other cryptocurrencies like Bitcoin. These NFTs can be bought and sold like traditional securities. Last month, Binance reached a plea deal with the United States Department of Justice, entailing a $43 billion fine, and its CEO stepped down due to corruption and money laundering charges.
How is Ronaldo connected?
The Portuguese footballer unveiled his partnership with Binance in November 2022, following which the company introduced a distinct ‘CR7’ collection of NFTs. These NFTs have been actively traded in the year since their launch and have been extensively promoted across Ronaldo’s social media accounts.
However, just last week, Ronaldo found himself facing a federal lawsuit in the United States filed by a group of investors who claim to have purchased ‘unregistered securities.’ They hold the forward responsible for exposing them to Binance and providing misleading information about it. In June 2023, the US Securities and Exchange Commission (SEC) declared that cryptocurrency tokens, akin to other securities, must be registered with them. The plaintiffs argue that tokens, such as the ‘CR7’ NFTs, traded on Binance, are unregistered.
The crux of the lawsuit revolves around the fact that Ronaldo endorsed a platform from which investors acquired ‘unregistered securities.’ The claimants contend that they incurred financial losses not only because Ronaldo’s own NFT initially valued at $77 is now valued at $1 but also because his endorsement implicitly supported other ‘unregistered’ tokens traded on Binance. According to insights from the 130-page lawsuit detailed by The Athletic, the plaintiffs assert that Ronaldo’s association with the company should not be viewed merely as an endorsement but as an attempt to “help Binance successfully solicit or attempt to solicit investors in Binance’s crypto-related securities from Florida and nationwide,” referencing the slogan on his website, which was also cited in the lawsuit.
What comes next?
Ronaldo will have the opportunity to respond, and the case may either be resolved outside of court or proceed to a legal trial. While the Portuguese forward has various legal defenses at his disposal, the debate surrounding the liability of an endorser for investment opportunities is now brought to the forefront. Similar legal challenges were faced by American athletes, including Naomi Osaka, Steph Curry, and Tom Brady, after the collapse of the FTX crypto-trading platform. The outcome of Ronaldo’s lawsuit may set a precedent for how athletes are held accountable for their endorsements, impacting not only their legal standing but also their public image and reputation.
Have other footballers promoted NFTs? Yes, many of them.
During the peak of the cryptocurrency frenzy, clubs like Liverpool and Manchester United introduced their NFT collections at the beginning of 2022. However, both clubs faced challenges, with Liverpool selling only about six percent of its collection, and Manchester United’s dropping in value by 85 percent. Former Chelsea legend John Terry aggressively endorsed the Bored Ape collection on social media, with other Chelsea players, past and present, such as Ashley Cole, Tammy Abraham, and Reece James, joining in. However, after the crypto crash in 2022, their involvement ceased.
Other footballers who endorsed NFT projects include Paul Pogba, Son Heung-Min, Neymar, Trent Alexander-Arnold, Andrew Robertson, Mateo Kovacic, Marcelo Brozovic, and more. Notably, Antoine Griezmann, Gerard Pique, and Rio Ferdinand invested in an entire NFT platform, Sorare. While not many currently endorse cryptocurrency tokens and exchanges on social media, football’s two highest-profile players, Ronaldo and Messi, continue to do so. Despite Ronaldo’s legal challenges with Binance, Messi recently shared social media posts about cryptocurrency trading platforms, highlighting the ongoing influence of these football stars in the crypto space.
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