After a sequence of dramatic events culminating in the resignation of Binance’s founder from the CEO position, now the Portuguese star footballer Cristiano Ronaldo is on the hook. In a class action lawsuit (a lawsuit on behalf of a large group of people), the defendants have argued that the promotion of Binance NFTs by Cristiano was ‘deceptive and unlawful’.
An NFT (Non-Fungible Token) is essentially a digital image that has its ownership inscribed on a blockchain and most of its value is derived from its collectibility rather than utility. It is more or less like those expensive paintings but only in the digital form.
Cristiano Launched His Maiden NFT Collection
Binance is a global cryptocurrency exchange that allows to trade Cryptocurrency, including Bitcoin, Ethereum, and their own Binance Coin (BNB) and other crypto assets including NFTs. Since the exchange was founded in 2017 by Changpeng Zhao, a Chinese-Canadian entrepreneur, it has grown to become one of the largest and most popular cryptocurrency exchanges in the world.
On the eve of the 2022 FIFA World Cup, Cristiano launched his maiden NFT collection CR7, named after his nickname that has his initials and jersey number on it. These were seven digital artworks that had his own animated statues depicting the football legend’s life moments. The tokens had opening price tags ranging from US$77 to US$10,000. The player has been quoted saying that the NFT collection would reward fans “for all the years of support”.
The plaintiffs of the lawsuit argued that the scale of Binance’s fraud could not have been magnified to this extent had they been not able to obtain assistance from highly influential celebrities like Ronaldo. They are now seeking a sum of not less than US$ 1 billion in damages from Cristiano in the lawsuit filed yesterday in the United States District Court in Florida.
The suit claims that the six-fold increase in online searches with the keyword “Binance”, following Cristiano’s NFT launch, is clear evidence for the player’s role in the Binance fiasco. He is also accused of not disclosing the earnings he received from Binance, although the US Securities and Exchange Commission (SEC) on behalf of US federal law mandates it.
The development has happened in the backdrop of events that made Binance agree to pay a record US$ 4.3 billion in fines and its CEO has pleaded guilty to one count of not complying with the Bank Secrecy Act. Early this year the SEC filed a lawsuit against Binance for violating a slew of US securities laws. In response, the largest crypto exchange in the world had to agree to pay a record US$4.3 billion in fines and its founder Changpeng Zhao had to step down from the position of CEO.
Last year American comedian Larry David and NFL player Tom Brady were in the hot seat in a lawsuit against FTX, another major cryptocurrency exchange. Major League Baseball, Formula-1, and Mercedes-Benz are also facing lawsuits over the promotion of this now-defunct exchange.
Cristiano currently wears boots for the Saudi Arabian club Al-Nasr. Notably, the Saudi Arabian Monetary Authority (SAMA) has issued warnings against the use of NFTs, citing concerns about their potential for financial instability and money laundering. Even after the allegation on Binance, Cristiano continued to promote the platform on his official website and social media, including X, the erstwhile twitter. Cristiano’s representatives declined to comment on the issue and so did Binance’s.
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Nigel Green of consultancy firm DeVere Group told the BBC that blaming Christiano Ronaldo alone diverts the issue and the focus should be directed towards regulators who should establish clearer guidelines for crypto assets.