Key Takeaways
- The plaintiffs claim they would not have purchased Nike NFTs had they known the assets were unregistered or that Nike would later wind down RTFKT’s operations.
- The complaint seeks unspecified damages exceeding $5 million, citing alleged violations of consumer protection laws in the US states of New York, California, Florida, and Oregon.
Nike is facing a proposed class action lawsuit from buyers of its non-fungible tokens (NFTs), who allege the company misled investors and caused millions of dollars in losses following the shutdown of its NFT subsidiary, RTFKT.
The lawsuit, filed Friday in the U.S. District Court for the Eastern District of New York, accuses Nike of orchestrating a “rug pull” and selling unregistered securities through its digital collectibles. The petitioners argue they would not have purchased Nike NFTs had they known the assets were unregistered or that Nike would later wind down RTFKT’s operations.
“Plaintiff and others would never have purchased the Nike NFTs at the prices they did, or at all, had they known that the Nike NFTs were unregistered securities or that Nike would cause the rug to be pulled out from under them,” the filing stated.
The complaint seeks unspecified damages exceeding $5 million, citing alleged violations of consumer protection laws in the US states of New York, California, Florida, and Oregon.
Nike acquired RTFKT in late 2021 as part of a broader push into digital assets and virtual branding. In December 2024, the company announced it would shut down RTFKT by the end of January 2025, citing a strategic shift. The move led to a sharp decline in the value of the NFTs created by the subsidiary, many of which were intended for trading on secondary markets.
Investors argue that Nike “used its iconic brand and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT sold,” according to the lawsuit. They allege that the closure left early buyers with devalued digital assets and no meaningful recourse.
The lawsuit follows technical issues earlier this month when several images associated with RTFKT’s NFTs temporarily disappeared. Samuel Cardillo, RTFKT’s head of technology, attributed the incident to problems with the cloud services provider Cloudflare, and the images were later restored.
Despite winding down RTFKT, Nike has said it remains committed to innovation in the digital space. In a recent statement, the company described RTFKT as a “source of innovation” that had inspired numerous creators and projects. However, the plaintiffs contend that such assurances did little to address the material losses faced by investors. Nike has not yet issued a public response to the lawsuit.
