Nike Inc. faces a proposed class-action lawsuit filed Friday in the U.S. District Court for the Eastern District of New York. Buyers of Nike’s non-fungible tokens (NFTs) claim they suffered major financial losses after Nike abruptly shut down its RTFKT unit.
The lawsuit, led by Australian resident Jagdeep Cheema, accuses Nike of misleading buyers about the safety and value of its NFTs. The plaintiffs argue that Nike’s NFTs were unregistered securities and that they would not have purchased them if they had known about regulatory risks or RTFKT’s closure. They seek over $5 million in damages for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
Based in Beaverton, Oregon, Nike acquired RTFKT in December 2021, marketing it as a digital fashion brand combining gaming, culture, and innovation. On December 2, 2024, Nike announced RTFKT’s closure, stating its innovations would continue through external creators. The sudden shutdown left NFT buyers feeling betrayed, with the lawsuit claiming Nike “pulled the rug out” from investors.
Did @RTFKT Clone X rug their art?
Nike, who acquired RTFKT in December 2021 for a reported $300M+, sunset the company's operations just three years later in December 2024.
Now the art has disappeared. There's probably a solid conversation about on-chain art to be had here. pic.twitter.com/o6c93yPoVK
— Steve 🤙 (@SteveKBark) April 24, 2025Nike has not yet responded to requests for comment, and the plaintiffs’ lawyers declined to provide statements.
The case raises questions about the legal status of NFTs, as courts across the U.S. debate whether to regulate digital collectables as securities. The plaintiffs argue that Nike failed to register its NFTs, exposing buyers to risks. This lawsuit forms part of broader legal challenges surrounding NFT and crypto asset regulations.
⛓️CHAIN REACTION
The artwork for Nike's RTFKT NFTs suddenly vanished as Cloudflare pulled the hosting plug. Now, @ar_io_network is stepping in as we wrestle with the dangers of centralization in web3.
Hosted by: @gazza_jenks & @rkbaggs#CHAINREACTIONhttps://t.co/f9eaYSA7Kl
— Cointelegraph (@Cointelegraph) April 25, 2025The case outcome could shape future NFT regulations and significantly impact brands and investors in the digital asset space. The plaintiffs now demand accountability, alleging that Nike violated consumer trust.
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