Football star Cristiano Ronaldo is confronted with a class-action lawsuit in the United States regarding his promotion of Binance, the world’s largest cryptocurrency exchange. Plaintiffs allege that Ronaldo’s endorsement influenced them to make loss-making investments, seeking damages exceeding US$1 billion. The lawsuit comes in the wake of Binance’s collaboration with Ronaldo on the “CR7” collection of non-fungible tokens (NFTs) in November 2022. Claimants argue that Ronaldo’s promotion led to a significant increase in searches for Binance, with users subsequently investing in what they consider “unregistered securities.”

The lawsuit asserts that Ronaldo should have disclosed the compensation received for the endorsement, a requirement under US law, according to the Securities and Exchange Commission (SEC). SEC Chair Gary Gensler emphasised the importance of celebrities disclosing their compensation when endorsing investment opportunities, particularly in the realm of cryptocurrency. The claimants argue that Ronaldo’s failure to disclose this information is a key element in their case.

Nigel Green, CEO of consultancy firm DeVere Group, suggests that the issue extends beyond Ronaldo, calling attention to global regulators’ slow establishment of clear guidelines for the evolving financial landscape. The class-action suit coincides with the US Justice Department’s demand for Binance to pay $4.3 billion in penalties and forfeitures, accusing the exchange of aiding users in evading sanctions globally and facilitating illicit financial activities. Binance’s CEO, Changpeng Zhao, resigned after admitting to money-laundering violations. Other entities, including Major League Baseball, Formula 1, and Mercedes-Benz, are also facing class-action lawsuits over their promotion of the failed crypto-exchange FTX. Ronaldo and Binance have not yet responded to requests for comment.

The lawsuit underscores the growing scrutiny of celebrities’ roles in promoting cryptocurrency platforms and the need for increased regulatory clarity in the evolving financial landscape. Critics argue that clear guidelines are essential to protect investors and prevent misleading endorsements, noting that the responsibility of both celebrities and regulatory bodies in addressing these concerns.