Nike has been hit with a class-action lawsuit that accuses the sportswear large of working a rug pull for shuttering its non-fungible token (NFT) platform RTFKT in January.
A bunch of RTFKT customers led by Jagdeep Cheema claimed within the proposed class swimsuit filed in a Brooklyn federal court docket on April 25 that they suffered “important damages” because of Nike touting its sneaker-themed NFTs to achieve buyers, then shuttering the platform.
The swimsuit claimed the NFTs have been unregistered securities, as Nike bought them with out registering with the Securities and Trade Fee. It accused the corporate of utilizing “its iconic model and advertising and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT bought.”
“As a result of the Nike NFTs derived their worth from the success of a given promoter and venture — right here, Nike and its advertising and marketing efforts — buyers bought this digital asset with the hope that its worth would enhance sooner or later because the venture grows in reputation primarily based on the Nike model,” the lawsuit argued.
The lawsuit asks for $5 million in damages, claiming Nike broke client safety legal guidelines and violated varied state unfair commerce and competitors legal guidelines.
A US court docket hasn’t definitively dominated on whether or not NFTs are securities. Nonetheless, in an April 9 letter to the SEC, market OpenSea urged the regulator to exclude NFTs from federal securities legal guidelines, arguing they don’t meet the authorized definition of a safety.
In its case in opposition to Nike, the category group mentioned that the court docket doesn’t essentially must rule on the authorized standing of NFTs to handle the criticism.
NFT market worth dips
In 2021, Nike acquired the NFT agency RTFKT Studios, which created digital sneakers.
In response to the criticism, holders of the ensuing Nike NFTs have been informed the tokens may very well be traded peer-to-peer on the secondary market and used to finish challenges and quests that might result in rewards.
Nike’s crypto kick NFT assortment was altering fingers for a mean of three.5 Ether (ETH), or round $8,000 once they have been first listed on April 18, 2022, however have been buying and selling for round 0.009 Ether, or roughly $16 as of April 21, according to OpenSea.
Nike shut down RTFKT in January, which the category swimsuit claims decimated buyers when “costs plunged and didn’t recuperate,” and in addition took away the possibility to participate within the challenges and quests, which the group argued was a major cause for buying the tokens.
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The general NFT market dropped sharply in the first quarter of 2025, with gross sales plunging 63% year-over-year, to $1.5 billion in complete gross sales from January to March 2025, down from $4.1 billion throughout the identical interval in 2024.
Nike didn’t instantly reply to a request for remark.
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