Nike is facing a class action lawsuit after abruptly shutting down its crypto-centric subsidiary, RTFKT, a move that allegedly left investors with heavy losses tied to Nike-themed NFTs and digital assets. The lawsuit, filed in the Eastern District of New York, is led by Australian investor Jagdeep Cheema and seeks over $5 million in damages.
Plaintiffs argue that Nike misled consumers into purchasing NFTs they now claim were unregistered securities. Investors say they were promised ongoing value and innovation through RTFKT’s digital fashion collectibles—a blend of gaming, culture, and crypto. Instead, they claim the sudden termination of the project in December 2024 rendered their digital assets essentially worthless.
Nike had acquired RTFKT in 2021 as part of a bold entry into the metaverse and digital fashion markets. At the time, the move was hailed as a strategic innovation, positioning Nike at the forefront of Web3. RTFKT’s high-profile collaborations and virtual sneakers quickly gained traction among collectors and speculators alike.
However, in late 2024, Nike quietly announced the end of RTFKT’s operations, citing a shift toward “ongoing creative influence” without further clarification. The closure, according to the plaintiffs, violated consumer protection laws in New York, California, Florida, and Oregon, as customers were left with assets that had lost nearly all market value.
The lawsuit revives ongoing legal questions about whether NFTs constitute securities under U.S. law—an area still lacking firm regulatory clarity. Plaintiffs argue that Nike’s failure to register these digital assets as securities or provide transparency about their long-term support amounts to deceptive business practices.
Nike has not yet publicly responded to the allegations. However, the case is being closely watched by legal experts and crypto market participants, as it may set precedent for how corporations are held accountable when participating in emerging digital asset markets.
As legal battles over the future of NFTs continue, the Nike-RTFKT case underscores the risks investors face when corporations exit experimental Web3 ventures without clear exit strategies or consumer protections in place.
