Nike Faces Lawsuit Over Sudden Shutdown Of NFT Business
Nike is facing a proposed class action lawsuit in federal court over the abrupt shutdown of its NFT venture, RTFKT, which plaintiffs allege caused substantial financial losses for investors. Filed on Friday in the US District Court for the Eastern District of New York, the lawsuit claims that Nike misled buyers by selling unregistered securities and then effectively “pulling the rug out” when it shut down RTFKT in December 2024.
The lead plaintiff, Australian resident Jagdeep Cheema, represents a group of NFT and crypto asset purchasers who say they would not have invested in RTFKT products had they known the business would be discontinued or that the tokens could be considered unregistered securities under US law.
The complaint asserts that Nike’s decision to shutter RTFKT caused a dramatic decline in demand and value for the NFTs, leaving holders with significant losses.
Nike acquired RTFKT in December 2021, touting it at the time as a forward-looking fashion brand at the intersection of culture, gaming, and innovation. The company officially announced the completion of RTFKT’s winddown on 2 December 2024, stating that its spirit would continue through the creators and projects it inspired.
The lawsuit, filed under case number 25-02305, seeks more than USD 5 million in damages for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
Nike has not yet responded publicly to the complaint, and attorneys for the plaintiffs have also declined to comment. As the legal landscape around NFTs remains murky, the outcome of this case could set important precedents for how digital assets are treated under federal and state laws.
(Inputs from Reuters)