Nike's NFT Platform Shutdown Sparks Class-Action Lawsuit

Nike is facing a class-action lawsuit after the abrupt shutdown of its NFT platform, RTFKT, which has left many investors feeling deceived and financially harmed. The lawsuit claims that Nike misled consumers by promoting unregistered securities and failing to maintain the platform, leading to significant losses for NFT holders.

Key Takeaways

• Nike's NFT platform, RTFKT, was shut down in January 2025.

• A class-action lawsuit seeks over $5 million in damages.

• Plaintiffs argue that the NFTs were unregistered securities.

• The lawsuit highlights the risks associated with investing in NFTs.

Background of the Lawsuit

In April 2025, a group of RTFKT users, led by Jagdeep Cheema, filed a class-action lawsuit in Brooklyn federal court against Nike. The plaintiffs allege that they suffered significant financial losses after Nike promoted its sneaker-themed NFTs, only to abruptly shut down the platform. The lawsuit claims that the NFTs were marketed as investments without proper registration, violating consumer protection laws.

The plaintiffs argue that they would not have purchased the NFTs had they known about the impending shutdown. They are seeking damages exceeding $5 million, citing violations of consumer protection laws in multiple states, including New York, California, Florida, and Oregon.

Allegations Against Nike

The lawsuit accuses Nike of conducting a "rug pull," a term used in the cryptocurrency world to describe a situation where developers abandon a project and take investors' money with them. Key allegations include:

• Unregistered Securities: The plaintiffs claim that the NFTs sold by RTFKT were unregistered securities, which Nike failed to disclose.

• Misleading Marketing: Nike allegedly used its brand power to hype the NFTs, leading investors to believe in their potential value.

• Platform Shutdown: The sudden closure of RTFKT resulted in a drastic drop in the value of the NFTs, which were once trading at high prices but plummeted after the announcement.

The NFT Market Context

The NFT market has seen a significant decline in value, with sales dropping sharply in early 2025. The overall market value fell by 63% year-over-year, raising concerns about the sustainability of NFT investments. Nike's decision to shut down RTFKT has further exacerbated these concerns, as many investors are left holding assets that have lost their value.

Implications for Nike and the NFT Space

Nike's legal troubles could have broader implications for the NFT market, particularly regarding how companies approach digital assets. The lawsuit raises important questions about:

• Regulatory Scrutiny: As NFTs gain popularity, regulatory bodies may increase scrutiny over how these digital assets are marketed and sold.

• Consumer Trust: The fallout from this lawsuit could damage Nike's reputation among consumers, particularly in the tech-savvy younger demographic that is crucial for its brand.

• Future of NFTs: Companies may need to reconsider their strategies for engaging with NFTs, ensuring they provide ongoing value to consumers rather than abandoning projects.

Conclusion

As the lawsuit unfolds, it will be crucial to monitor how Nike responds and what this means for the future of NFTs. The case serves as a cautionary tale for investors in the digital asset space, highlighting the risks associated with unregulated markets and the importance of transparency from companies.

Nike has yet to comment on the lawsuit, but the outcome could set a precedent for how NFT projects are managed and regulated in the future.

Sources

• Nike sued for $5 million over its shutdown of NFT platform RTFKT, Cointelegraph.

• The brutal customer experience lesson of Nike's RTFKT NFTs, TechTarget.

• Nike is facing a lawsuit from people who bought its NFTs, The Verge.

• Bronstein, Gewirtz & Grossman LLC Announces that Nike-Themed Non-FungibleTokens ("NFTs") Investors with Substantial Losses Have Opportunity to Lead Class Action Lawsuit, KRQE.