Nike Under Fire: Class-Action Lawsuit Over NFT Platform Shutdown
May 7
3 min read
Nike is facing a class-action lawsuit from users of its NFT platform RTFKT, which was abruptly shut down in January 2025. The lawsuit claims that the company misled investors by promoting unregistered securities, leading to significant financial losses for NFT holders.
Key Takeaways
Nike is sued for over $5 million by RTFKT NFT purchasers.
Plaintiffs allege deceptive marketing and unregistered securities violations.
The lawsuit highlights the ongoing debate over the legal status of NFTs.
Background of the Lawsuit
In April 2025, a group of RTFKT users, led by Jagdeep Cheema, filed a class-action lawsuit in the Eastern District of New York. They allege that Nike engaged in deceptive practices by promoting its sneaker-themed NFTs to attract investors, only to shut down the platform shortly after, leaving many with worthless digital assets.
The lawsuit claims that the NFTs sold by Nike were unregistered securities, as they were not registered with the Securities and Exchange Commission (SEC). The plaintiffs argue that they would not have purchased the NFTs had they known about their unregistered status.
Allegations Against Nike
The lawsuit outlines several key allegations against Nike:
Deceptive Marketing: Nike allegedly used its iconic brand to hype the RTFKT NFTs, misleading investors about their potential value.
Unregistered Securities: The NFTs are claimed to be unregistered securities, violating consumer protection laws.
Financial Losses: The abrupt shutdown of the RTFKT platform led to a significant drop in the value of the NFTs, causing financial harm to investors.
The Impact of RTFKT's Shutdown
Nike acquired RTFKT in December 2021, aiming to expand its presence in the digital collectibles market. However, the platform was shut down in January 2025, which the lawsuit claims decimated the value of the NFTs. The plaintiffs argue that the closure eliminated opportunities for trading and participating in challenges associated with the NFTs, which were key reasons for their purchase.
The lawsuit seeks over $5 million in damages, citing violations of consumer protection laws across multiple states, including New York, California, Florida, and Oregon.
The Broader Context of NFTs and Legal Challenges
The legal status of NFTs remains a contentious issue. While some argue that they should be classified as securities, others contend that they do not meet the legal definition. This lawsuit against Nike is part of a growing trend where consumers are leveraging state laws to challenge losses related to digital assets, sidestepping the uncertainties of federal securities law.
In recent years, the SEC has begun to take a more active role in regulating the cryptocurrency and NFT markets, leading to increased scrutiny of companies involved in these sectors. The outcome of this lawsuit could have significant implications for how NFTs are treated under the law and how companies approach marketing and selling digital assets in the future.
Conclusion
As the lawsuit unfolds, it highlights the risks associated with investing in NFTs and the responsibilities of companies in the rapidly evolving digital asset landscape. Nike has yet to respond publicly to the lawsuit, but the case could set a precedent for future legal actions involving NFTs and consumer protection.
Sources
Nike sued for $5 million over its shutdown of NFT platform RTFKT, Cointelegraph.
Nike Hit by $5 M. Lawsuit by RTFKT Users, ARTnews.com.
NFT Purchasers Sue Nike Over Alleged Crypto Scam, Law.com.
Nike Facing Lawsuit From People Who Purchased RTFKT NFTs, Hypebeast.
Nike is facing a lawsuit from people who bought its NFTs, The Verge.