Not just Cristiano Ronaldo? Taking stock of celebrities sued for participating in crypto projects

Celebrity Crypto Controversies Beyond Cristiano Ronaldo - A Closer Look at Lawsuits Involving Celebrities and Their Involvement in Cryptocurrency Projects

Author: Huohuo | Blockchain in Plain Language

Recently, football star Cristiano Ronaldo was collectively sued by multiple virtual asset investors in the United States. He is accused of promoting NFTs issued by BA and is required to compensate at least $1 billion (approximately 7.1 billion yuan).

According to observations, Cristiano Ronaldo is not the first celebrity to be involved in negative rumors related to cryptocurrency. Since the cryptocurrency market crash in 2022, negative news about celebrities involved in cryptocurrency has been increasing.

So, why is Cristiano Ronaldo being sued? And which other celebrities have encountered cryptocurrency troubles? Today, let’s take a look at those celebrities who have been sued for participating in cryptocurrency projects.

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Cristiano Ronaldo

Cristiano Ronaldo, a famous Portuguese football star known as C-Ronaldo in China, was sued for $1 billion by three men in a court filing submitted in Miami, USA. Other well-known figures or organizations, including F1, Mercedes-Benz, and Major League Baseball, are also named in the collective lawsuit. Cristiano Ronaldo is being sued for promoting NFTs issued by BA.

So, what kind of cooperation does Cristiano Ronaldo have with BA?

BA announced the establishment of an exclusive long-term partnership with Cristiano Ronaldo in June 2022. Since then, both parties have planned to launch a series of NFT collectibles. BA stated that all NFTs will be personally designed by Cristiano Ronaldo, and BN will be the exclusive platform for sales.

At that time, Zhao Changpeng, who was still the CEO of BA, stated, “Cristiano Ronaldo is one of the best football players in the world. His influence has surpassed sports, making him a multidimensional superstar idol. Through his authenticity, talent, and charity, he has amassed a loyal fan base worldwide. We are pleased to provide a platform for his fans to have a closer connection with him.”

He Yi, co-founder and COO of BA, said, “We believe the metaverse and blockchain are the future of the internet. We are honored to work with Cristiano to help more people understand blockchain and demonstrate how we can build Web3 infrastructure for the sports and entertainment industry.”

Cristiano Ronaldo also stated, “I am very aware of the importance of the relationship with fans. I want to bring fans an unprecedented experience through NFTs, and I believe my fans will love this project as much as I do.”

Therefore, in November 2022, Cristiano Ronaldo’s first NFT series was released, and he personally participated in the global promotion of the NFT sale, aiming to popularize Web3 among more fans through the NFT campaign.

The first NFT series has a total of 7 dynamic images, divided into 4 levels: Extremely Rare (SSR), Super Rare (SR), Rare (R), and Common (N). Each NFT will showcase an important moment in Cristiano Ronaldo’s life, such as the “bicycle kick,” as well as his youth spent in Portugal. Different levels of NFTs include different merchandise.

Then in July 2023, the two parties collaborated to launch the second exclusive C Ronaldo NFT collectible, the NFT GOAT series, called ForeverCR7: The Goat. There are a total of 20 designs, symbolizing a tribute to Ronaldo’s 838 career goals. It also offers collectors four different levels of rarity.

Following that, on October 11th, the third collaboration took place, launching the NFT series CR7 ForeverZone. The core of this release was 50,000 mystery boxes, each containing a unique CR7-centered NFT. Buyers also had the chance to personally own a football, jersey, or golden ticket NFT with Ronaldo’s autograph, as well as a personal meeting with C Ronaldo.

Overall, Ronaldo collaborated with BA three times for NFTs. Unfortunately, on November 23rd, the BA lawsuit resulted in a fine of $4.368 billion, and CZ stepped down. As a result, a few days later, Ronaldo and others received a collective lawsuit.

The plaintiff (SEC) claims that BN and celebrities like Ronaldo guided users towards large and unsafe investments and stated in the lawsuit: “Existing evidence suggests that BN’s fraudulent conduct has reached such high levels by offering and selling unregistered securities and obtained active assistance and support from some of the world’s wealthiest, most powerful, and most famous organizations and celebrities, just like defendant C Ronaldo.”

BA poster endorsed by C Ronaldo

However, according to the latest news on December 1st, Ronaldo may settle the lawsuit against him for $750,000. Despite the actions taken by the Department of Justice, Ronaldo’s relationship with BA has not been terminated, and Ronaldo himself tweeted about collaborating on something new with BA.

Elon Reeve Musk

Elon Reeve Musk is the CEO of Tesla and SpaceX. He has publicly expressed his enthusiasm for cryptocurrencies and personally holds Bitcoin, Ethereum, and Dogecoin. Both Tesla and SpaceX also hold Bitcoin.

From March to May 2021, he briefly supported Bitcoin as a payment method for purchasing Tesla cars, making Tesla the first car company to accept Bitcoin as a payment method.

However, he has been involved in legal issues related to his tweets and Dogecoin. Due to his frequent comments on cryptocurrencies, especially Dogecoin, his every statement has caused fluctuations in the price of Dogecoin.

Among them, a single tweet even caused the price of Dogecoin to skyrocket by 1100% in less than two days. However, he later said in an interview that Dogecoin was a scam, which caused the price to plummet. Later, Musk also stated that he would send a Dogecoin to the moon, causing the price of Dogecoin to rise by 15%. Subsequently, Dogecoin surged 336% within a few days, and its market value even surpassed Ford Motor Company. After becoming the CEO of Twitter, Musk replaced the company’s bluebird icon with the symbol of Dogecoin, causing Dogecoin’s price to skyrocket again by over 30%.

Time and time again, Dogecoin’s price fluctuated with Musk’s actions, truly manipulating the volatility of Dogecoin’s price.

However, soon in June 2022, Musk, SLianGuaiceX, and Tesla were accused by Dogecoin investors of participating in a Dogecoin cryptocurrency scam, facing a lawsuit of 258 billion dollars.

This class-action lawsuit claims that Musk manipulated Dogecoin using his position between May 2021 and June 2022, and the plaintiffs (investors of Dogecoin) claim to have lost 86 billion dollars. In addition, the lawsuit requests to declare Dogecoin trading as gambling and prohibit unauthorized promotion of Dogecoin. The reaction within the cryptocurrency community to this lawsuit was mixed, with some considering it absurd, while others pointed out the lack of restraint in the allegations made in the lawsuit.

At the time, Musk and his company did not respond. On April 3, 2023, Musk filed an application with the court seeking to dismiss the 258 billion dollar Dogecoin lawsuit filed against him. Musk’s lawyer claimed that the investors’ lawsuit was “fantasy fiction,” and that Musk’s tweets about Dogecoin were harmless and even somewhat foolish.

Kim Kardashian (Kimberly Noel Kardashian)

Now let’s take a look at the third celebrity – American reality TV star Kardashian.

On October 3, 2022, the U.S. Securities and Exchange Commission (SEC) announced charges against American reality TV star Kardashian for her social media posts promoting EthereumMax Token, which is a cryptocurrency Token and includes a platform link, thus directing investors to purchase the Token. Additionally, she concealed the $250,000 she received in promoting fees, which violates the anti-touting provisions of federal securities laws.

Kim Kardashian

In June 2021, during the cryptocurrency market boom, popular influencer Kim Kardashian from the Kardashian family joined the bull market. At that time, she had 225 million followers on Instagram, so she took advantage of her platform as a KOL and posted a promotional post about Ethereum MaxToken.

In her post, Kardashian wrote, “This is not financial advice, just sharing something my friend just told me about Ethereum Max Token!” She added the word “advertisement” in the tweet tags.

At that time, Ethereum Max was not ETH, but a tradable asset built on existing cryptocurrency technology, an independently developed project.

Four months later, on October 3, 2022, the SEC filed charges against Kim Kardashian, accusing her of selling crypto asset securities provided and sold by EthereumMax on social media without disclosing the promotional fees she received. Later, it was proven that Kardashian received $250,000 to promote Ethereum Max. Although Kardashian marked her Instagram post as “advertisement,” it was not enough to satisfy regulatory authorities.

Subsequently, Kardashian agreed to a settlement on the charges and paid $1.26 million, which includes approximately $260,000 in illegal proceeds (i.e., her promotional payment), pre-judgment interest, and a $1 million fine. She also agreed to refrain from promoting any cryptocurrency tokens for three years.

Paul Pierce

In addition to Kardashian, basketball legend Paul Pierce was also fined for promoting Ethereum Max.

Paul Pierce, a former NBA star for the Boston Celtics, played 15 seasons in the NBA. He helped the Celtics win the NBA championship in 2008 and was named the Most Valuable Player of the NBA Finals. After retiring in 2017, he became one of the legends in the team’s history.

On February 18, 2023, according to TMZ, former NBA player Paul Pierce was fined $140.9 thousand for improper promotion of a crypto token, despite receiving only $244 thousand as compensation for promoting the crypto token.

In the SEC’s announcement regarding the charges against Pierce, it stated that Pierce’s specific offense was promoting and selling EMAX (Ethereum Max) tokens on social media. However, he also did not disclose the promotional compensation he received for this endorsement, as well as his false and misleading promotional statements about EMAX, including posting an account screenshot showing a large number of holdings and profits without disclosing that his actual holdings were much lower than the amount shown in the screenshot. Additionally, Pierce directly placed a link to the Ethereum Max website in the tweet, which provided a tutorial on how to purchase EMAX tokens.

According to the SEC investigation team, Pierce did not disclose to the public that he received over $244,000 worth of EMAX Token as compensation for his tweets on Twitter.

Translation: Federal securities laws clearly state that any celebrities or individuals must disclose the nature, source, and amount of compensation they receive for promoting cryptographic asset securities. Investors have the right to know if securities promoters are impartial, and Mr. Pierce failed to disclose this information.

Faced with the charges of violating federal securities laws regarding anti-touting and anti-fraud provisions, Pierce did not deny the investigation results, agreed to settle these charges, and paid a fine of $1.409 million, disgorgement, and interest. He is also prohibited from promoting any cryptographic assets for three years.

Celebrities promoting FTX

By the end of 2022, FTX collapsed, bringing trouble not only to the cryptocurrency bear market but also to the celebrities who once promoted projects under FTX.

After the bankruptcy of FTX, a collective lawsuit in Florida, USA, listed celebrities such as comedian Larry David, famous American football player Tom Brady, former model Gisele Bundchen (ex-wife of Tom Brady), and basketball stars Kevin Durant and Stephen Curry as defendants, on the grounds that they all publicly promoted FTX. The plaintiffs (FTX customers) accused these celebrities of deceptively promoting unregistered securities to the public and causing them to lose billions of dollars.

For example, in FTX’s Super Bowl ad in February 2022, comedian Larry David appeared in the ad, showing David’s late realization of some of the greatest inventions in human history, including the wheel, light bulb, coffee, and democracy. Although David realized that FTX is a safe and easy way to enter the world of cryptocurrency, unfortunately, Larry missed the opportunity to invest in FTX, and the slogan at the end of the ad was “Don’t be like Larry.”

Photo Credit: Screenshot from YouTube

But now, maybe everyone should learn from Larry’s advertisement.

Another example is Stephen Curry, the star point guard of the NBA’s Golden State Warriors, who has won three NBA championships and two regular-season MVP awards. He is also a philanthropist and entrepreneur.

In August 2021, he became a brand ambassador for FTX and in an ad for FTX, Curry said, “I’m not an expert in crypto-related stuff, and I don’t have to be, because with FTX around, I can safely buy, sell, and trade crypto assets.”

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Although lawyers representing some of these celebrities claim that the lawsuits are “baseless” and that courts generally do not hold endorsers responsible for the actions of the companies they promote, due to the large number of people involved in this case, these celebrities and organizations are facing ongoing accountability.

Celebrities promoting Yuga Labs NFTs

Also facing collective accountability are the celebrities endorsing Bored Ape NFTs.

In November 2022, stars such as Madonna, rapper Snoop Dogg, comedian Kevin Hart, talk show host Jimmy Fallon, singer Justin Bieber, and basketball player Stephen Curry, among others, faced a collective lawsuit for promoting Bored Ape Yacht Club NFTs and their parent company, Yuga Labs.

According to two plaintiffs, Yuga Labs conspired with the celebrities to artificially inflate the price of Bored Ape Yacht Club NFTs and deceive fans into investing. The plaintiffs filed a lawsuit in the United States District Court for the Central District of Los Angeles, seeking $5 million in damages.

Bored Ape NFTs

A celebrity affiliated with Yuga Labs stated that these claims are “opportunistic and parasitic, and we firmly believe that they are unfounded and look forward to proving it.”

However, a federal judge in California later dismissed the lawsuit, stating that investors “should conduct reasonable investigation and due diligence before betting on contemporary zeitgeist.”

But at the same time, the judge ruled that the plaintiffs’ lawyers could amend their claims and refile the lawsuit.

Chan Ling Jiu

In China, there is also a celebrity facing crypto litigation.

In September 2023, the JPEX case involving the Hong Kong crypto exchange platform and an amount of HKD 1.6 billion affected mainly individuals from Hong Kong and Taiwan. Taiwanese celebrity Chan Ling Jiu was implicated, initially being questioned as a witness. However, it took a turn when some victims filed a lawsuit against him, alleging that his promotion had inducement suspicions.

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Nine Chen, originally named Chen Zhihao, is a Taiwanese singer and host. He became a popular singer on the internet in 2009 and signed with Rolling Stone Records in 2013.

After the bankruptcy of JPEX, his agent stated on October 2nd that they had agreed on an endorsement fee of 10 million Taiwanese dollars (approximately 2.37 million Chinese yuan) but the payment was not made on time. As a result, the contract was terminated in July this year. In addition, Nine Chen also invested about 15% of his assets into JPEX, considering himself a victim as well.

However, many investors have accused Nine Chen of violating the “Banking Act” and other crimes. They claim that they chose to invest because of Nine Chen’s endorsement but fell victim to fraud. Therefore, they filed a lawsuit against Nine Chen, causing him to be changed from a witness to a defendant.

However, the extent of his involvement needs further investigation by the prosecution.

Summary

It is not difficult to see that apart from a few celebrities who are subject to regulation and supervision, most celebrities who are sued are involved in projects that have collapsed and caused huge losses for investors.

Regarding these foreign celebrities, SEC Chair Gary Gensler once said, “These cases serve as a reminder to celebrities that, under the law, when they promote securities, they must disclose to the public how much compensation they received and cannot lie to investors. When celebrities endorse investment opportunities including crypto asset securities, investors should carefully evaluate whether the investment is suitable for them and understand why the celebrities are endorsing these activities.”

The SEC emphasized at the end of the statement, “Gensler is watching you!”

However, it is also understandable that these celebrities are being sued after the projects fail. In order to attract more retail investors to join the gold rush in the bull market, related companies in the crypto field invest more money to drive valuation soaring and spare no expense in advertising. On the one hand, they spend a lot of money to purchase advertisements in top-level sports events, and on the other hand, they invite well-known celebrities from the film and sports industries to endorse and promote their projects.

These cases also serve as a warning to us: On the one hand, celebrities should be cautious in cooperating and promoting projects, and clearly indicate the risk factors. On the other hand, investors should not blindly believe in the halo of idols. Before investing, they should do their own research (DYOR), conduct relevant investigations, and participate on the basis of a full understanding of the risks.

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